Insurance Australia Group (IAG
) chief executive Peter Harmer said that his company is considering increasing its stock in a joint venture in Malaysia, helping consolidate the fragmented insurance market in Southeast Asia. The company nixed plans to expand in China last year.
At a recent shareholders meeting, Harmer said that he is satisfied with the company’s growth in Asia, and that it is planning to increase its holdings in the joint venture with AmBank. Currently, IAG
holds a 49% stake in AmGeneral Holdings.
“We like to think we can enter into a negotiation with our joint venture partner in Malaysia to increase our share,” said Harmer.
Notably, AmBank is implicated in the 1MDB controversy hounding Malaysian Prime Minister Najib Razak. The Prime Minister is accused of funneling close to US$700 million from a state-owned development company to his personal bank accounts.
Harmer said that he was pleased with the growth of the company’s Asian ventures, noting that operations in Thailand and Malaysia are growing above the respective countries’ GDP rates, with gross written premiums growing over 7% in the past financial year. The insurance group’s earnings in Asia rose from AU$21 million to $26 million (US$16 million to $19.8 million).
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