ING is in the advanced stages of disposing of its Malaysian insurance business to a South Korean insurer as part of its Asian insurance and investment management divestment operations, according to a source familiar with the matter.
This may see some of the other Southeast Asian ING insurance operations being bought over by the South Korean insurer.
At this juncture, the relevant parties are keen for the deal to go through. The disposal, he said, would involve the South Korean insurer either acquiring a controlling stake or the entire equity of ING’s Malaysian insurance business. Without revealing further details due to the sensitivity of the deal, he said the price that would be paid for the acquisition would definitely be more than what Zurich Insurance Group paid for the acquisition of Malaysian Assurance Alliance (now rebranded and renamed Zurich Insurance Malaysia), that is 344 million ringgit.
Due to ING’s bigger insurance business and market share because of its larger agency force and wider suit of products and services, the price tag would be higher, he noted.
ING’s insurance operations in Malaysia are currently undertaken by ING Insurance. ING Insurance is a wholly-owned subsidiary of ING Management Holdings, which in turn is wholly owned by Netherlands-based ING. McKinsey is said to be roped in as a consulting group for the proposed acquisition exercise.
The South Korean insurer, believed to be among the top-three insurers in that country, has for the last couple of months been making an in-depth study of the potential growth of the Malaysian insurance market and whether its growth target could be met. After realising the growth potential of the insurance market in Malaysia and its relatively strong economy and ING’s firm foothold in the insurance sector, the source said it had decided to proceed with the acquisition.
By having operations in Malaysia, it would help Korean multinational companies in their businesses in terms of providing them insurance coverage and protection. At the moment, there is no Korean insurer in the country. According to recent foreign news reports, names like Korea Life Insurance Co and KB Financial Group had shown interest in acquiring ING insurance operations in the region.
Meanwhile, ING Insurance Bhd president and CEO Bruce M Hodges in responding to queries on the proposed acquisition said: “ING Group is currently exploring options for a sale of its Asian insurance and investment management businesses, while keeping other options open.
“The group is committed to conducting these processes with the utmost diligence in the interests of all stakeholders, including our customers, employees and shareholders. No decision has been made on this matter.”