Mitsui Sumitomo Insurance (MSI) has signed an agreement with Malaysia-based Hong Leong Financial Group (HLFG) to expand the non-life and life insurance business in Malaysia. The agreement is effective this autum.

This agreement followed approval that MSI has received from the regulatory authorities in Malaysia.

According to MSI, the alliance with HLFG will allow it to simultaneously achieve expansion of its current non-life business and entering the life insurance market, in Malaysia which is one of the most strategically important countries in Asia.

Under the agreement, HLFG subsidiary Hong Leong Assurance’s (HLA) non-life insurance business will be merged with that of MSI subsidiary MSIG Insurance Malaysia (MISGM), where MSI will own 70% of MISGM while the rest will be owned by HLFG.

In addition, MSI will also purchase 30% of outstanding shares in HLA for RM940m (approximately JPY25.4bn), thereby entering the life insurance market in Malaysia.

As per the agreement, MSI will expand insurance sales through Bancassurance at HLFG’s bank subsidiary, and will supply non-life and life insurance products through the synergy effect of MSI and HLFG.