IAG planning to increase its interest in general insurance business and exit life insurance
Insurance Australia Group (IAG) has announced that it is increasing its interest in the general insurance business of AmAssurance, its joint venture in Malaysia, from 30% to 49% and at the same time exiting the life insurance part of
the business.
Insurance Australia Group said that this is in line with its strategy to pursue opportunities that strengthen its position in select Asian general
insurance markets.
According to IAG, the Malaysian restructure is being effected through: splitting the existing AmAssurance composite insurance joint venture in which IAG has a 30% interest, into general insurance and life insurance components; IAG selling its 30% interest in the life insurance business; and IAG increasing its interest in the general insurance business to 49%, the maximum allowable under Malaysia’s current foreign investment rules. This business will be renamed AmG Insurance and will retain the right to use the AmAssurance brand.
Regulatory approvals have been received for the restructure, with completion anticipated in December 2008. Following revised local regulatory requirements, IAG’s overall investment in Malaysia will increase by around A$20 million.
Justin Breheny, CEO of IAG for Asia, said: Following the increase in our equity participation, we look forward to continuing to work with our joint venture partner to grow the business and strengthen its underwriting performance. We’ll do this through further penetration of the joint venture’s distribution network and diversification of its product portfolio.