Saturday, January 20, 2018

Great Eastern may shed stake in Malaysian operations

The insurer Great Eastern Holdings is reported to be in talks with Malaysian banks regarding the possible sale of a stake in its Malaysian business, according to DBS Equity Research.

Based on the report, several other foreign insurance firms with operations in Malaysia, including Prudential Malaysia and Tokio Marine Insurance Malaysia, could be holding similar talks as part of complying with the 70% foreign ownership cap on insurers that will be strictly implemented by the Bank Negara Malaysia.

Under the rule, which was first issued in 2009, wholly foreign-owned insurers have three options for reducing their stakes, according to DBS analyst Sue Lin Lim.

One is to sell 30% of their shares to the public, another is to form a joint venture with a local partner and the third is to sell to local investors.

Great Eastern is said to be exploring its options to meet the necessary requirements.

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