AmAssurance Sold To MetLife

American insurer MetLife Inc is banking on AMMB Holdings Bhd’s insurance arm to expand its reach in Malaysia while eyeing the opportunity to establish itself and grow in Indonesia in the future.

MetLife International Holdings Inc (MetLife), a subsidiary of MetLife Inc, has agreed to buy 50% plus one share in AmLife Insurance Bhd and 50% minus one share in AmFamily Takaful Bhd (AmTakaful) for a total of RM812 million from AMMB.

The deal will see MetLife and Am- Life and AmTakaful entering into exclusive 20-year bancassurance and bancatakaful agreements for the distribution of life insurance and family takaful products through the distribution network of AMMB’s banking subsidiaries, AmBank (M) Bhd and AmIslamic Bank Bhd, across Malaysia.

In January last year, AMMB bought back a 30% stake in its two insurance divisions for RM245 million from Resolution Ltd, ending its partnership with the UK-based firm. A 10% stake in both companies should be priced at about RM82 million and a 50% stake in both companies should cost about RM410 million.

Nonetheless, a premium is always paid for exclusivity as evidenced by Khazanah Nasional Bhd partnering Canadian firm Sun Life Financial Inc in a RM1.8 billion deal to acquire 98% of CIMB Aviva Assurance Bhd, creating a new company called Sun Life Malaysia Assurance Bhd.

Sun Life paid more than Khazanah acknowledged with the difference in price being attributed to the extra consideration being paid to CIMB for a number of items, including a share in a strengthened bancassurance agreement with CIMB Bank Bhd.