KUALA LUMPUR: AMMB HOLDINGS Bhd, following the approval of the Minister of Finance, said its 51% subsidiary AmG Insurance Bhd (AmG) yesterday inked a conditional agreement with Kurnia Asia Bhd for the outright acquisition of Kurnia Insurans (Malaysia) Bhd for RM1.55 billion cash.
The purchase will be funded by AmG entirely with capital funds to be injected by its shareholders -- 51% by AMMB and 49% by Insurance Australia Group Ltd, AMMB’s strategic partner in AmG.
In a statement, AMMB chairman Tan Sri Azman Hashim said: “This acquisition will position us to deliver on AmG’s strategic objective of being among the top three domestic general insurers.
“The combined businesses of AmG and Kurnia will emerge as the largest domestic general insurer and the market leader in motor insurance.”
AmG-Kurnia will have about 13% market share in general insurance and about 22% market share in motor policies, valued by gross written premium.
AMMB group managing director Ashok Ramamurthy noted: “There are substantive cost synergies and operational efficiencies.
“The three million policyholders of Kurnia form a ready pool of customers for cross-selling opportunities of AmBank group’s other financial products and services, such as banking and fund management.”
Post acquisition, both the AmAssurance and Kurnia brands will continue to be used. The integration process is expected to take two years.
“AmG, as a member of AmBank Group, currently has access to a strong bancassurance distribution channel, with an agency distribution force of 2,900,” said AmG chief executive officer Duncan Brain.
“Kurnia has a 5,500-strong agency force through a network of 30 branches.
“For now both AmG and Kurnia businesses will continue to run as they are and it is very much ‘business as usual’.”
Azman added: “This acquisition complements AmBank group’s medium term aspiration and strategic priorities to grow income from profitable segments. It will accelerate our recurring non-interest income growth.”