Insurance Australia Group Limited announced that its 49 percent-owned Malaysian associate, AmG Insurance Berhad, “has submitted for local regulatory review a proposal to enter into an agreement to acquire Kurnia Insurans (Malaysia) Berhad (Kurnia), the principal general insurance business of Kurnia Asia Berhad.”
The proposal comes just four days after IAG announced that it had entered into an agreement to purchase New Zealand’s AMI insurance business for NZ$380 million (approximately A$288 million [US$287.96 million), enhancing its position as New Zealand’s leading general insurer.
IAG explained that if the proposal is approved and completed, “this transaction would result in the merged AmG and Kurnia business attaining the leading position in the Malaysian motor insurance market, in line with AmG’s and IAG’s stated strategy.”
If the transaction is allowed to go forward, IAG said it would “fund its share of the purchase price from internal resources and, on a pro forma 30 June 2011 basis, would retain a regulatory capital position above its long term benchmark of 1.45 to 1.50 times the minimum capital requirement.
“This is after allowing for the recently completed unsecured subordinated bond issue in New Zealand, the agreed acquisition of a 20 percent interest in Bohai Property Insurance Company Limited and the agreed purchase of the insurance business of AMI, as well as the potential acquisition of Kurnia by AmG.”
Source: Insurance Australia Group