ING sells Malaysian insurance unit to Hong Kong-based AIA

 Dutch financial group ING Groep NV (AMS:INGA) said on Thursday it would sell its insurance business in Malaysia to Hong Kong-based insurer AIA Group Ltd (HKG:1299) for some EUR1.3bn (USD1.7bn) in cash.

Under the terms of the agreement, AIA is taking over ING’s Malaysian life insurance operations, its employee benefits business and its 60% in venture ING Public Takaful Ehsan Berhad, the vendor said.

The move marks ING’s first major step towards disposing of its insurance and investment management businesses in Asia, reflecting progress in its restructuring efforts, CEO Jan Hommen commented. The combination of this ING business with AIA’s operations in Malaysia will create a top player in this market with a good position for further growth, Hommen added.

The process for the sale of the rest of ING’s Asian insurance and investment management businesses is ongoing, the group said, adding it expected the disposal of its Malaysian insurance activities to result in a net gain of around EUR780m.

Completion is expected to take place in the first quarter of 2012, subject to securing regulatory clearances.

ING is among the major life insurers in Malaysia with a portfolio including life, general, employee benefits and Takaful, serving over 1.6m customers. The company has around 1,200 employees and 9,200 tied agents in the country.

Present in Malaysia since 1948, AIA’s footprint covers 15 countries in Asia Pacific, leading many of these markets.