Generali swoops to acquire AXA's insurance business in Malaysia

Re/insurer AXA has reached an agreement with Italian insurer  Generali to sell its insurance operations in Malaysia, which includes its 49.99 percent shareholding in AXA Affin General Insurance (AAGI) and 49 percent shareholding in AXA Affin Life Insurance (AALI), for total cash proceeds of RM 688 million (€140 million).

Generali has agreed to purchase of the majority of the shares held by AXA and Affin in the joint ventures, approximately 53 percent of AAGI (49.99 percent from AXA and 3 percent from Affin and minorities) and AALI (49 percent from AXA and 21 percent from Affin), respectively.

In total, Generali's consideration for the combined transactions is of RM 1,290 million (€262 million).

AAGI ranks 5th in the Malaysian P&C insurance market with a 7.9 percent market share, and AALI ranks 11th in the Malaysian life insurance market.

The acquisitions will position Generali as one of the leading insurers in the Malaysian market, creating the second P&C insurer by market share and entering the country’s life insurance segment.

Following the deal, Generali will operate in Malaysia through two companies – one in the P&C segment and the other in the life segment. In the P&C segment, it plans to merge the businesses of MPI Generali with AXA Affin General Insurance. Once the transactions are completed, Generali will hold 70 percent in both the life and P&C entities, which will trade under the Generali name. Affin Bank will hold the remaining 30 percent.

Additionally, Generali has submitted an application to the local regulator in order to acquire the remaining shares of MPI Generali Insurans Berhad (MPI Generali) held by its Malaysian joint venture partner, Multi-Purpose Capital Holdings Berhad (MPHB Capital).

Generali, AXA, Affin Bank and MPHB Capital are working together to obtain the required regulatory approvals. The expected completion date of the acquisition is in the second quarter of 2022.

Generali has been active in Malaysia since 2015, when it acquired a 49 percent stake in Multi-Purpose Insurans Berhad - a P&C insurance subsidiary of Multi-Purpose Capital Holdings to create MPI Generali.

Jaime Anchústegui Melgarejo, CEO International of Generali Group, said: “The transactions are fully aligned with Generali’s strategy to strengthen its leadership position in high potential markets, like Malaysia, which represents a very attractive opportunity as it is home to a growing middle-class population and with an insurance penetration rate that is still relatively low compared to other more mature markets in the Asian region.”

Rob Leonardi, regional officer of Generali Asia, added: “This is an exciting time for Generali in Malaysia and for our growth strategy in Asia. Over the last five years we have enjoyed working together with our business partner to reshape MPI Generali and now we can further optimise our strategic position, secure economies of scale for more efficient operations and deliver even greater value for our customers. We have ambitions to further transform and strengthen our business in this important market and look forward to working with our customers, employees, agents, partners and distributors on this journey.”

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