Wednesday, May 11, 2011

Mitsui buys 35pc of HLFG insurance unit

Mitsui Sumitomo Insurance Co is expanding its partnership with Malaysian billionaire Quek Leng Chan’s Hong Leong Financial Group Bhd by acquiring a 35 per cent stake in its Islamic insurance unit.

The Tokyo-based company, a unit of Japan’s biggest casualty insurer MS&AD Insurance Group Holdings Inc, bought the interest in Hong Leong MSIG Takaful Bhd for RM33.6 million (US$11 million), according to a joint company statement. The stake was previously held by Tokio Marine Holdings Inc, which decided to exit the joint venture, Raymond Choong, Hong Leong Financial’s chief executive officer, told reporters in Kuala Lumpur today.

“Malaysia is an important market for Mitsui Sumitomo,” Masaaki Nishikata, Mitsui Sumitomo Insurance managing executive officer said in Kuala Lumpur. “Takaful is the final piece of the insurance business that we want to have a foot into as part of our ongoing plans to expand outside Japan.”

Islamic insurance contributions worldwide will rise 31 per cent to US$12 billion in 2011 from US$9.15 billion last year, Ernst & Young LLP said in a report on April 10. Malaysia is the second biggest market for Shariah-compliant insurance, known as takaful, after Saudi Arabia, according to the report.

Mitsui Sumitomo bought a 30 per cent stake in Hong Leong Financial’s conventional life business in the Southeast Asian nation for RM940 million in June last year. They have since merged their general insurance operations. -- Bloomberg

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