Zurich Insurance front-runner to buy MetLife’s Malaysia insurer

ZURICH Insurance Group has emerged as the front-runner to buy a majority stake in the Malaysian insurance business of US insurer MetLife and Kuala Lumpur-listed AMMB Holdings, said people with knowledge of the matter.

A deal could value AmMetLife Insurance at about US$400 million and would need approval from the Malaysian central bank, said the sources, who asked not to be identified as the process is private. Singaporean insurer Great Eastern Holdings also remains interested in buying the roughly 70 per cent stake, the sources added.

Should a transaction materialise, MetLife will exit its investment in AmMetLife while AMMB will retain a 30 per cent stake, one of the sources said. Bank Negara Malaysia’s guidelines limit overseas companies to a maximum holding of 70 per cent in local insurance firms. 

Deliberations are ongoing, and the companies could still decide not to proceed with the transaction, said the sources.

A spokesperson for AmBank said if it has anything pertinent to announce, the bank will undertake the necessary disclosure. A Zurich representative declined to comment.

“We do not comment on market rumour or speculation,” a representative for MetLife said in a statement. 

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MetLife and AMMB teamed up to form their Malaysian insurance partnership AmMetLife in 2014, its website showed. The parties started gauging interest for the potential divestment of the jointly owned company in 2020, Bloomberg News reported.

AmMetLife offers life insurance and wealth protection services through more than 200 AmBank and AmMetLife branches in the country, according to its website. Its gross earned premium was about RM617 million (S$189.3 million) for the fiscal year ended Mar 31, a 4.4 per cent increase from a year earlier, its latest financial report showed.

MetLife unloaded its Hong Kong units to FWD Group Holdings in 2020 for an undisclosed amount. The US insurer’s Asian operations currently include businesses in China, Japan and South Korea, said its website. BLOOMBERG