AXA Affin: BH Insurance to boost ranking

AXA Affin General Insurance Bhd (AAGI) will tap BH Insurance (M) Bhd's strength in commercial insurance as it seeks to be among the top five insurers in Malaysia.

Chief executive officer (CEO) of AXA Asia General Insurance Jan van den Berg said the combination of both insurers will result in an annual gross written premium (GWP) of RM655 million.

This will give it a 6 per cent share of the market, ranking it sixth in the industry. "It is our intention to move quickly into the top five of the general insurance industry. The union of AXA Affin and BH Insurance will give us the strength to take advantage of Malaysia's economic performance," he said at a signing ceremony in Kuala Lumpur yesterday.

AAGI has agreed to buy 80 per cent of BH Insurance from Boustead Holdings Bhd and the remaining 20 per cent from Felda Marketing Services Sdn Bhd, the marketing arm of the Felda Group. AAGI president and CEO Jahanath Muthusamy said BH Insurance has a bigger commercial portfolio at over 60 per cent whereas retail and health insurance accounts for 45 per cent and 11 per cent of AAGI's business.

AAGI is buying BH Insurance for RM453.2 million. It will pay RM362.58 million to Boustead and RM90.65 million to Felda. Upon completion of the merger, the shareholding of AAGI will include AXA at 42.4 per cent, Affin Holdings Bhd (33.6 per cent), Felda (16 per cent) and minority shareholders the balance of 8 per cent.

Boustead's group managing director Tan Sri Datuk Lodin Wok Kamaruddin expects the merger to be completed by the second quarter of this year. "Boustead group's strategic decision to dispose of its equity in BH Insurance bodes well for us given the positive impact to our bottom line and the fact that this will help pare down our gearing as well," he said. Lodin said Boustead will strive to further cut its debt.

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