* Third insurance deal in Malaysia in past year
* Controlling stake in AmLife Insurance worth $350 mln
* Zurich, HK tycoon Richard Li, Japanese firms also bidding
By Denny Thomas and Saeed Azhar
HONG KONG/SINGAPORE, May 9 Manulife Financial
Corp and Metlife Inc are among companies that
have made bids for a controlling stake in the life insurance
unit of Malaysian lender, AMMB Holdings Bhd, the third
insurance deal in the country over the past year.
Zurich Insurance Group, Hong Kong tycoon Richard
Li's Pacific Century Group, ACE Ltd and two Japanese
insurers have also submitted first-round bids to buy up to 70
percent in unlisted AmLife Insurance Bhd worth $350 million,
people familiar with the deal told Reuters. Foreign ownership in
Malaysian insurers is capped at 70 percent.
The deal highlights how some sellers are cashing out while
the demand for insurance assets is strong. Malaysia is
Asia-Pacific ex-Japan's ninth-biggest insurance market by
premiums and a young and growing population makes its attractive
to global and regional companies keen to get a foothold,
The hot, regional insurance M&A market has been spurred by
Southeast Asia's rising personal incomes and the industry's
strong growth potential. Asia-Pacific insurance M&A set a record
of $30.5 billion worth of deals last year, driven by the
activity in places such as Malaysia and Thailand.
Officials with AMMB Holdings declined comment. All suitors
mentioned in the story declined comment. The sources declined to
be identified as the sale process is confidential.
AmLife earned 4.7 million ringgit ($1.5 million) net profit
for six-months ended September 2012, on 188 million ringgit net
premiums, according to the company's financial statements.
The business had an embedded value (EV), which measures the
value of an insurance company based on future earnings from
current policies, of about 650 million ringgit and it could be
sold for 2.5-3 times EV, people said.
The last insurance deal in Malaysia was struck at 3.2 times
EV, when sovereign wealth fund Khazanah Nasional and Sun Life
Financial Inc acquired the insurance joint venture of
CIMB Group Holdings and Aviva Plc for $597
Malaysia's life insurance industry has grown 13.5 percent in
the past three decades and its ratio premium-to-GDP reached a
healthy 3.3 percent compared with nearly 10 percent for Hong
Kong and more than 4 percent for Singapore, according to Swiss
Given the country's strong economic growth, life insurance
premiums in Malaysia are set to grow 5.4 percent in 2014,
compared with world average of 3.9 percent, Swiss Re said.
"Malaysia's life insurance penetration rate has plenty of
room for further expansion, particularly among the indigenous
Malay population with a relatively young population and
increasing household income," Credit Suisse said a recent