UK insurer pays RM170m for AmLife stake
by Sharmila Ganapathy, The Edge Daily
KUALA LUMPUR: UK-listed life insurer and pensions firm Friends Provident plc is buying a 30% stake in AmLife Insurance Bhd, the life insurance arm of AmBank Group, for RM170 million.
The UK insurer is purchasing the stake as part of its international expansion plans while for the AmGroup, the divestment is part of its strategy to bring in foreign shareholders to beef up its life insurance arm.
The sale follows the recent split of AmBank Group’s life insurance and general insurance businesses, which took place on Dec 1. The split is a result of a restructuring exercise of AmBank’s insurance businesses, which is expected to complete by the first quarter of next year, according to the company’s filing with Bursa Malaysia on Nov 28.
According to AmAssurance 2007 accounts, its life insurance arm has total business assets of RM1.4 billion.
Friends Provident chairman Sir Adrian Montague said they were committed to the Asian region and entering the Malaysian market was a natural and exciting progression of their strategy, “We’re now looking forward to working with AmLife in Malaysia,” Montague told reporters after announcing a strategic partnership between Friends Provident and AmLife Insurance, where both companies will collaborate in product development.
“Malaysia offers plenty of opportunities for AmLife to introduce life insurance and income protection plans as well as market leading pension arrangements. The synergy between our two organisations provides a winning combination,” Montague said.
“Our partnership will benefit the Malaysian life insurance industry with their expertise in online protection arrangements and leading edge pension plans. AmLife is keen to quickly learn and make available these solutions through its well spread distribution channels,” said AmBank Group chairman Tan Sri Azman Hashim.
To a question if Friends Provident was seeking acquisitions elsewhere in the Asian region, Montague said expanding its international business was a priority of the life insurer.
“We will be looking out generally for opportunity. But for the moment, AmLife is the major expansion we are looking at,” Montague said.