KUALA LUMPUR: Affin Bank Bhd and Generali Asia NV have teamed up to create Malaysia’s second largest general insurance business with a gross written premium (GWP) of more than RM2 billion.
The two parties entered into an implementation agreement with Affin disposing of a 21 per cent stake in AXA Affin Life Insurance Bhd (AALI) and 2.95 per cent in AXA Affin General Insurance Bhd (AAGI) to Generali.
Affin said the bank had also agreed for AAGI to buy certain assets and liabilities of MPI Generali Insurans Bhd (MPIG) via a business transfer to create an enlarged company (MergeCo).
“The transactions are subject to the approvals of Bank Negara Malaysia and other relevant authorities/parties,” the bank said in a statement today.
According to Affin, the general insurance business of AAGI and MPIG would be merged under the newly-enlarged MergeCo.
“Affin currently owns 51 per cent of AALI and 49.95 per cent in AAGI. Affin’s eventual shareholding in both AALI and MergeCo will be reduced to 30 per cent upon completion of the transaction,” it added.
The entry of Generali as the new major shareholder of AALI and AAGI (MergeCo) will enable Affin to monetise part of its investments in the insurance businesses.
The proceeds would be reallocated to fund business growth in its core banking business, Affin said.
“From the AAGI merger, there will be enhanced brand equity for Affin via ownership of a larger scale general insurer in Malaysia which is expected to be the second biggest general insurance provider with an estimated GWP of more than RM2.0 billion and total assets of more than RM6.0 billion.”
Affin believes that with the new partnership with Generali, being one of the largest global insurance groups, both insurance entities will be poised to scale greater heights.
Affin president and group chief executive officer Datuk Wan Razly Abdullah Wan Ali said the bank was excited to be taking MergeCo into the second position in the general insurance business arena.
“As shareholders of both the insurance entities, we hope to create synergistic growth opportunities for AAGI and AALI and reinforce our commitment to offering holistic financial solutions to our customers and enhance the overall customer experience through the future bancassurance partnership with Generali,” said Wan Razly.
Generali Asia regional officer Rob Leonardi said this was an exciting time for Generali in Malaysia and for its growth strategy in Asia.
Leonardi said over the last five years, Generali had enjoyed working together with its business partner to reshape MPIG and now the company can further optimise its strategic position, secure economies of scale for more efficient operations and deliver even greater value for customers.
“By pooling Affin’s bancassurance channel with Generali’s expertise in Life and General insurance, our customers will have access to a more extensive range of products and services.
“We have ambitions to further transform and grow our business in this important market and look forward to working with our customers, agents, partners and distributors on that journey,” he added.
Source: News Straits Times
