FWD to buy majority stake in Malaysian life insurer ahead of IPO

FWD Group Holdings, the pan-Asian insurance company owned by Hong Kong billionaire Richard Li, has agreed to buy a majority stake in Gibraltar BSN Life, a move that allows it to tap into the South-east Asian market’s growth potential ahead of FWD’s planned initial public offering (IPO).

FWD, along with a group of investors, will buy a 70 per cent stake in Gibraltar BSN from a subsidiary of New York-listed Prudential Financial, according to a statement on Monday (Feb 20). The transaction will allow FWD to make a foray into the Malaysian life insurance market. Bank Simpanan Nasional will continue to hold the remaining 30 per cent.

Financial terms of the transaction, which is expected to close in the second quarter, were not disclosed. FWD plans to partner with Bank Simpanan to further develop and grow Gibraltar BSN. FWD entered Malaysia in 2019 as a provider of takaful products, including term life, critical illness, hospital cash benefit and medical protection. Malaysia is the fourth-largest life insurance market by premium in South-east Asia, according to the statement.

“We’re creating a full-service offering in Malaysia and will be able to offer both family takaful and life insurance solutions in a rapidly growing market with huge long-term potential for growth,” Huynh Thanh Phong, group chief executive officer and executive director of FWD, said in the statement. “With these strategic developments, we also substantially complete our footprint across key South-east Asia markets in the 10th anniversary year for FWD Group.”

The move in Malaysia follows FWD’s long-term strategy to expand across South-east Asia. The company continues to work towards an IPO in Hong Kong this year, Bloomberg News has reported. It could seek to raise about US$1 billion from the IPO, people familiar with the matter have said.

The insurer’s value of new business rose 24.6 per cent year over year to US$405 million in the first half of 2022, on a constant exchange rate basis, the company said in September. While FWD reported an adjusted loss of US$333 million for the six months ended Jun 30, its operating profit before tax jumped about 111 per cent to US$200 million from the same period in 2021. BLOOMBERG