Insurance Australia’s Malaysian Arm to acquire rival
Insurance Australia Group's Malaysian associate plans to become that country's largest motor insurer through a takeover.
The move, which still require regulatory approval, would further progress IAG's strategy to grow its presence in Asia, the Australian Associated Press said.
IAG last week increased its market leading position in New Zealand's general insurance market with the $NZ380 million takeover of the AMI insurance business.
The company said on Tuesday that AMG Insurance Bhd, in which IAG has a 49 per cent stake, submitted a proposal to acquire Kurnia Insurans, the principal general insurance business of Kurnia Asia Bhd.
Further information would be released as the approval process proceeded, IAG said.
The acquisition of New Zealand's AMI Insurance, which is mutually-owned, will boost IAG's market share across the ditch to more than 40 per cent.
"We're excited about this and think it's a good move for IAG.
"It certainly gives us a significant position in New Zealand, which is a market we know well and a market we expect to perform well," said chief executive Mike Wilkins.
AMI has been looking for an injection of capital since April after it was badly hit by claims in the wake of two devastating earthquakes in Christchurch.
IAG will not have to absorb AMI's outstanding earthquake liabilities because the New Zealand government has agreed to pick up AMI's $NZ1.8 billion earthquake claims bill as part of the deal, the company said.
About $NZ1.3bn of those claims are expected to be offset by reinsurance cover.
Despite the devastating impact of the earthquakes on New Zealand's insurance market, Wilkins said he was confident there remained long-term growth prospects in the nation.
"While 2011 was a year of unprecedented natural peril in New Zealand, we remain confident of the market outlook.
"I can confirm reinsurers still have the appetite to insure earthquake risk, and they share our longer-term outlook about the attractiveness of the New Zealand market," he added.
AMI wrote more than $NZ360 million worth of insurance premiums in the year to June 30.
With 500,000 customers, its core business is insuring homes, contents and vehicles.