Thursday 28 Mar 2024
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KUALA LUMPUR: Fairfax Financial Holdings Ltd is acquiring the general insurance business of MCIS Insurance Bhd to expand its presence in the region. The deal is expected to be completed in the first quarter of 2015.

In a statement yesterday, Fairfax’s wholly-owned unit The Pacific Insurance Bhd said it has entered into a business transfer agreement with MCIS, formerly MCIS Zurich Insurance Bhd, and Koperasi MCIS Bhd, to effect the transaction.

“The transaction is subject to customary closing conditions, including court approval, and is expected to close in the first quarter of 2015,” said Pacific Insurance. The statement was jointly issued by Pacific Insurance and MCIS.

It said Pacific Insurance has been granted approval by Bank Negara Malaysia to acquire the general insurance business of MCIS.

The value of the deal, however, was not disclosed.

MCIS is an established life and general insurer in Malaysia with over RM180 million in gross written premiums in 2013 for its general insurance business.  

On completion of the deal, the general insurance division of MCIS will trade under the name “Pacific Insurance”, becoming part of the Fairfax Asia group under the leadership of Ramaswamy Athappan, the statement said.

“We are thrilled to have the general insurance business of MCIS join the Fairfax group and we look forward to working with Koperasi MCIS as our new partner in Malaysia,” said Prem Watsa, chairman and chief executive officer (CEO) of Fairfax.  

“MCIS has a very strong presence in the Malaysian insurance sector and this is a great opportunity for us to expand our operations in the region”, added Prem.

“We commenced a restructuring exercise to strengthen our participation in the Malaysian insurance industry in both the life and general insurance business through strategic partnerships to enhance opportunities and optimise synergies,” said Datuk Balaram Petha Naidu, chairman of Koperasi MCIS. Koperasi MCIS has been involved in the insurance business for more than five decades.  

Meanwhile, MCIS CEO Kevin Jones said the business transfer augurs well for MCIS as it paves the way for the life insurance business to establish itself on a stronger footing to compete with market players.

 

This article first appeared in The Edge Financial Daily, on December 3, 2014.

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