Malaysian regulator signs off FWD purchase from HSBCDecember 27 2018 by InsuranceAsia News Staff
HSBC’s Asia insurance arm has secured Bank Negara Malaysia’s approval to divest its stake in a Malaysian life insurance joint venture to Hong Kong-headquartered FWD Group.
HSBC Amanah Takaful Malaysia, which started in 2006, is selling the 49% stake to FWD Life, a subsidiary of FWD. Financial terms of the transaction, which is likely to concluded by the end of June, have not been disclosed.
Malaysia’s JAB Capital and the Employees Provident Fund Board of Malaysia own a 31% and 20% stake, respectively, in the Amanah Takaful unit.
The move is part of FWD’s efforts to increase its footprint in Asia. It is understood the insurer plans to eventually own a majority share in the insurer by buying more shares from the other partners.
FWD’s acquisition will add to its Asian market footprint that already covers Hong Kong, Indonesia, Japan, Macau, the Philippines, Singapore, Thailand and Vietnam. The insurer is also in the process of setting up a joint venture in China.
The purchase shows that foreign companies are keen on establishing presence or reinforcing it in Malaysia despite the changes in foreign ownership rules for insurers.
By 2020, the insurance penetration of Malaysia is targeted to hit 4%, according to the General Insurance Association of Malaysia, which seeks to boost life and non-life insurance penetration in order to better serve the country’s economy.
According to the Bank Negara Malaysia, both life and non-life penetration is still at a meagre 2% of the population.
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