AMMB shortlists global insurance partners

AMMB shortlists global insurance partners
Business & Markets 2013
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
Friday, 23 August 2013 10:41

KUALA LUMPUR: AMMB HOLDINGS BHD [], which is in search of a strategic partner for its life and takaful insurance businesses, has identified and shortlisted several tier-one global insurance players.

According to group managing director Ashok Ramamurthy, AMMB hopes to tie up with one of the insurance players by the end of this year.

It has applied to Bank Negara Malaysia (BNM) for approval to start negotiations.

Ashok told the media after the group AGM and EGM yesterday that AMMB is currently waiting for a response from BNM within the next week or two. "They are all tier-one global players … there would be instant name recognition when they partner with us," said Ashok.

AMMB had in April announced a bidding process to divest up to 70% of its insurance businesses, AmLife Insurance Bhd and AmFamily Takaful Bhd.

It was earlier reported that the insurance assets to be divested could be worth as much as US$600 million (RM1.99 billion).

According to a report by Alliance Research, several global insurance companies, including Manulife Financial Corp, Metlife Inc, Zurich Insurance Group and ACE Ltd had submitted bids to buy stakes in these two AMMB companies.

Ashok said once approval from BNM has been secured, AMMB and the potential foreign partners can begin the process of presentation and valuation.

This process is expected to end by September or mid-October this year.

"If everything goes according to plan, it could happen by the end of this year. But sometimes the process could take a little longer if one of the parties has ground presence here in Malaysia, in which case we have to reverse the process which might take a little bit longer," said Ashok.

When asked on the stakes AMMB would hold in the partnership, he said the group would likely have more stake in the takaful business and reduce its stake in life insurance as the global Islamic financing is important to Malaysia.

"But this would also depend on our potential partner, and how the arrangements would be like," said Ashok, adding that the quantum of the majority stake in the partnership is also subject to BNM's approval.

AMMB hopes to catch the interest of youths in the country for its life insurance and takaful businesses in its efforts to garner a long-term investment that would contribute to the group's growth for the next 20 to 30 years.

"We think we have an attractive life insurance and takaful story for the next 20 to 25 years.

Hence, we would like to stay in the business with a partner who would be able to bring the right ideas and skills for us to tackle that emerging story first," said Ashok.



This article first appeared in The Edge Financial Daily, on August 23, 2013.