IAG has revealed plans to sell its operations in Thailand and Indonesia to Tokio Marine & Nichido Fire Insurance Co., Ltd (Tokio Marine) for approximately $525 million.
The sale agreement relates to IAG’s interests in 98.6% of Safety Insurance in Thailand and 80% of PT Asuransi Parolamas in Indonesia.
Tokio Marine is a subsidiary of Tokio Marine Holdings, Inc., the largest property and casualty (P&C) insurance group in Japan, with operations in 38 countries.
Separately to the deal with Tokio Marine, IAG has also agreed to sell its 73.07% interest in its AAA Assurance Corporation subsidiary, based in Vietnam.
Peter Harmer, Managing Director at IAG, said: “We are pleased to accept the offer for our businesses in Thailand and Indonesia from Tokio Marine. We believe Tokio Marine is an ideal owner given its experience in the region, and that this is a good outcome for the associated employees, customers and other stakeholders.”
IAG expects all transactions to be completed by June 2019, and believes the combined deals will lead to an after-tax profit of at least $200 million in the company’s FY19 results.
The sale of the Thailand, Indonesia, and Vietnam operations is also expected to add at least 13 basis points to IAG’s Common Equity Tier 1 (CET1) ratio, enhance IAG’s reported insurance margin by 50 points, and have a negligible impact on GWP growth.
