IAG taps India suitors as Asia exit beckonsFebruary 14 2019 by InsuranceAsia News Staff
Insurers, reinsurers and private equity firms have been approached to buy Insurance Australia Group’s 26% stake in SBI General Insurance for around Rs34 billion (US$487 million).
The firms include Liberty Mutual, Swiss Re and Zurich, in addition to private equity firms Apax, Advent, Blackstone Group, KKR and Warburg Pincus, according to sources known to the Economic Times.
Canada Pension Plan Investment Board, sovereign wealth funds such as Abu Dhabi Investment Authority and Temasek, as well as existing investors such as Premji Invest have also been approached to buy out IAG, which is looking to exit its nine-year-old Indian joint venture with the State Bank of India.
None of the companies have commented on the story.
The decision to sell in India follows other retreats from Asian markets as IAG, overseen by group chief executive Peter Harmer, decides to concentrate on its core markets of Australia and New Zealand.
Last year, Tokio Marine & Nichido Fire Insurance bought IAG’s operations in Thailand, Indonesia and Vietnam. The Japanese property-casualty insurer paid A$525 million (US$390 million) for IAG’s 98.6% interest in Safety Insurance in Thailand and its 80% holding in Asuransi Parolamas in Indonesia. In a separate transaction, Tokio Marine bought IAG’s 73.07% interest in AAA Assurance in Vietnam for an undisclosed sum.
It is also understood that in Malaysia, Allianz Malaysia and Mitsui Sumitomo Insurance were shortlisted in a bidding round for AmGeneral Insurance, in a deal that could value the P&C insurer at around M$3.3 billion (US$800 million). IAG owns 51% of AmGeneral while IAG holds the rest of the business.
It has been reported that Allianz is in pole position for the stake.
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The tie-up will create a top-five player at Lloyd's.
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Potential buyers are watching the “troubled” insurer’s progress with interest as disposals continue.
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Axis Bank is the only large Indian lender without an insurance holding.
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Stake sale could help the group to cut debt.