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AIA sells Sri Lanka general insurance unit

Janashakthi Insurance, one of the fastest-growing insurance companies in Sri Lanka, has bought AIA General Insurance Lanka for SLRs3.2 billion (US$22.8 million).

AIA General Insurance Lanka is the fully-owned general insurance subsidiary of AIA Insurance Lanka.

Janashakthi Insurance managing director Prakash Schaffer told reporters in Colombo that the insurer would use funds raised in an upcoming rights issue to finance the acquisition.

The deal is subject to customary closing conditions including regulatory and transactional approvals and is expected to be closed by the end of October.

Janashakthi Insurance, which has a 17.5% market share in Sri Lanka, was open to more investments, Schaffer said.

He added that the Sri Lankan insurance industry was moving towards a positive era, with more voluntary consolidations expected to take place.