KUALA LUMPUR (OCT 11 ,2012): The US$1.73 billion (RM5.3 billion) acquisition of ING's insurance business in Malaysia by AIA Group Ltd will make American International Insurance Bhd (AIA Malaysia) the largest local life insurer by total premiums, from fourth place currently, when it is completed by the first quarter of 2013.
AIA Group regional chief executive Ng Keng Hooi said the move to acquire Malaysia's third largest insurer will boost AIA's business with US$2.05 billion in life insurance premiums in the country, or an enlarged market share of 24.8 %, from 11.3 % currently.
AIA will also have the largest agency force in Malaysia with 16,600 agents. ING Malaysia now has 9,200 agents while AIA Malaysia has 7,400 agents. The two have a combined customer base of 2.8 million.
"With this acquisition, the Malaysian business will also be the fourth largest in the AIA Group, after Hong Kong, Thailand and Singapore," he told a press conference here today.
"We're confident of the business because ING is a good and quality business. The thing that has gone wrong is that ING in the Netherlands needs money, and that's why they have to sell ING Malaysia out. It's not often that you get a good company running well up for sale," he said, adding that it is a rare opportunity to expand AIA's scale and reach.
On Wednesday, Reuters reported that the AIA deal marks the first sale in an ING auction of Asian insurance operations announced in January. It is part of a global asset sell-off to repay 10 billion euros (US$12.9bil) in state aid received during the 2008 global financial crisis.
"ING is ranked number two in bancassurance here and has an exclusive arrangement with Public Bank Bhd. This will broaden our bancassurance business from 1% to 14% and offers huge opportunity for growth," said Ng.
He said AIA will also leverage on ING Malaysia's number one position in employee benefits (group insurance), in which ING dominates with a 50% market share here.
"We believe the Malaysian market has good potential going forward and is a high growth market, as life insurance is under penetrated with half of Malaysians still uninsured. There is also growth potential for (the amount of coverage) because in Malaysia the average sum insured is RM50,000, which is not enough."
AIA Group will fund the acquisition through its international cash resources and external debt financing.
The signing of sales and purchase agreement is conditional upon the approval of Bank Negara Malaysia and the completion of the deal is conditional upon receipt of regulatory approvals in Malaysia and the Netherlands.
MEKAH - Seramai 3.1 juta jemaah selesai menyempurnakan ibadah haji pada hari terakhir di sini semalam tanpa berlaku sebarang insiden besar.
