Insurance Australia Group, AMMB Seek to Sell Their Malaysian Auto Insurer: Sources

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The owners of AmGeneral Insurance Bhd., Malaysia’s second-biggest auto insurer, have restarted a sale process and are seeking as much as $1 billion for the company, people with knowledge of the matter said.

Kuala Lumpur-listed AMMB Holdings Bhd. and Insurance Australia Group Ltd., invited potential suitors to submit non-binding bids for the Malaysian insurer by the end of this month, according to the people, who asked not to be named as the information is private. AMMB controls 51% of AmGeneral, while IAG owns the remaining balance.

AMMB and IAG explored the disposal of AmGeneral in 2017 and shortlisted Allianz Malaysia Bhd. last year, Bloomberg News previously reported. But the deal fell through after failing to get approval from Bank Negara Malaysia, the country’s central bank, one of the people said. The central bank declined to comment on the matter. The owners began a new sale process in recent weeks, the person said.

Details of the potential deal could change, and AmGeneral’s owners could decide to hold on to their stakes, the people said. A representative for AmGeneral and AMMB declined to comment. A representative for IAG said the company’s focus is on its core Australian and New Zealand businesses, and is exploring options for its remaining Asian general insurance interests, including divestments when appropriate.

AmGeneral is the second-biggest auto insurer in Malaysia and insures one in six cars in the country, according to its website. It ranks in the top five in overall market share for general insurance, as of the first half of 2018, the website said.

The company has more than two million customers and a network of 7,000 agents and dealers marketing products under the AmAssurance and Kurnia brands. AmGeneral underwrote 1.5 billion ringgit ($347 million) of gross premiums and earned 220 million ringgit in net income in the financial year ended March 2019, according to the insurer’s latest available annual results.

–With assistance from Harry Brumpton.