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IAG offloads Asian businesses for $525m

2018/06/20

Author:管理员

Insurance Australia Group is set to be left with surplus capital that it may return to shareholders after selling three of its Asian businesses for more than half a billion dollars.
The insurer on Tuesday said it would sell its businesses in Vietnam, Thailand and Indonesia to two different overseas buyers, which will deliver an after-tax profit of $200 million in its full-year results next year.

IAG said the sale of the Asian businesses would boost its capital position.
Tokio Marine & Nichido Fire Insurance, part of Japan's largest property and casualty insurance group, would purchase IAG's Thai and Indonesian businesses for $525 million, IAG said.

“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 chief executive Peter Harmer said.
IAG is also selling its dominant stake in AAA Assurance Corp, based in Vietnam. It did not disclose the sale price for this deal.

It still has minority stakes in insurance businesses in Malaysia and India, and it is understood these remain under review.

The sales come after IAG earlier this year launched a strategic review of its Asian operations, citing "limited" expansion opportunities in the region.
IAG said the asset sales would be wrapped up by June 2019 and the profit from the sales would be treated as an "unusual item", and excluded from its cash earnings and dividend calculation purposes.
But it added that the sale proceeds would contribute to its future capital management, with further details to be provided at its full-year financial results next month. Analysts have previously predicted IAG may return capital to shareholders, such as through a special dividend.

IAG said the sales would lift its common equity tier 1 ratio, a key gauge of strength, of "at least" 1.2. This is higher than IAG's benchmark CET1 range of 0.9 to 1.1.
Credit Suisse analyst Andrew Adams said the Thai and Indonesian businesses were being sold at high multiples, and he forecast a $320 million share buyback at next month's results, as well as $300 million paid out in special dividends next financial year.
It said the sales would have a "negligible" impact on its growth in gross written premiums, and it would widen the group's insurance margin by about 50 basis points.
IAG shares rose 2.4 per cent to a record $8.42.

Source:The Sydney Morning Herald 2018-06-20

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