MILANO – Malaysia has already made – in the literary field – the fortune of a Tiger, now the Lion hopes it is a good omen for insurance success. In fact, Generali reached an agreement to take over the majority of AXA Affin’s joint ventures in Malaysia and submitted to the local authorities the request to increase MPI Generali to 100%, taking over the stake in the joint venture of the partner Multi-Purpose Capital Holdings Berhad. The consideration for the transactions is 1,290 million Malaysian ringgit, equal to 262 million euros, subject to adjustments at closing.
“With these operations, in line with the strategy of strengthening its leadership position in high-potential markets, Generali transforms its activities in Malaysia to become the second operator in the non-life segment”, explains a note from the Trieste-based company.
In detail, the agreements provide that Generali will take over 70% of the Axa Affin Life Insurance jv, of which 49% from AXA and 21% from Affin, and the majority stake in Axa Affin General Insurance, of which 49.99% from AXA and 3% from Affin and other minority shareholders. At the same time, the Lion will rise from 49 to 100% of Mpi Generali Insurans Berhad. At the end of this round of investments, Generali will operate in Malaysia through two companies, one active in the Life segment and the other in the Non-Life segment, a branch in which Generali intends to merge the activities of Mpi Generali with Axa Affin General Insurance. Once the agreements have been finalized, Leone will hold 70% of both companies, which will operate under the Generali brand and which will have the minority partner in Affin Bank with the remaining 30% of the capital.
The negative impact on the solvency ratio is estimated at approximately 3.5 basis points.
Thanks to the acquisition, Generali – which was assisted by HSBC as financial advisor and by Wong & Partners for the legal aspects – will position itself among the main insurers in the Malaysian market, creating the second largest non-life operator by market share and entering the life segment, and will enter into an exclusive bancassurance agreement with Affin Bank, the tenth bank in the country with over 110 branches, for the sale of conventional products in both life and non-life. Completion of the acquisition is expected in the second quarter of 2022.
“The transaction is in line with Generali’s strategy to strengthen its positioning in high-potential markets, such as Malaysia, which offers interesting opportunities considering the growing middle class and an insurance penetration rate that is still relatively low compared to Asian markets. more mature “, said Jaime Anchústegui Melgarejo, CEO of Generali International. “This is a very important moment for the presence of Generali in Malaysia and for our growth strategy in Asia”, added Rob Leonardi, Regional Officer of Generali Asia. “We can now further optimize our strategic position, ensure economies of scale for greater synergies and offer a higher value service to our customers. Our ambition is to further transform and grow our business in this important market.” Axa Affin General Insurance collected gross premiums of € 287 million in 2020 while Axa Affin Life Insurance recorded an annual premium equivalent (ape) of € 24 million.
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