Insurance Australia Group Ltd (ASX: IAG) announced on Tuesday that it will sell its Thai, Indonesian and Vietnamese businesses and net a profit of at least $200 million.
Insurance Australia Group or IAG is one of Australia’s leading insurance companies (and one of a few Aussie companies to have Warren Buffett as an investor).
IAG will sell its 98.6% holding in Thailand’s Safety Insurance and its 80% stake in PT Asuransi Parolamas in Indonesia to Tokio Marine & Nichido Fire Insurance Co., Ltd., part of Tokio Marine Holdings Inc., for around $525 million.
“We are pleased to accept the offer for our businesses in Thailand and Indonesia from Tokio Marine,” IAG’s CEO Peter Harmer said.
In a separate deal, IAG will sell its 73.07% stake in AAA Assurance Corporation.
Combined, the two transactions are expected to net IAG an after-tax profit of $200 million or more in FY19.
IAG said the sale will have a negligible impact on gross written premium (GWP) growth for FY18 but will improve its insurance margin by about 0.50%. Its capital buffer, or CET1 ratio, will increase by at least 0.13%.
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