Insurance Asia News, 6/8/2020

Kuala Lumpur-headquartered Multi-Purpose Capital Holdings (MPHB Capital) is looking to divest part of its 51% stake in Malaysian P&C player MPI Generali, says a report by The Edge Markets. On August 4, MPHB Capital renewed its efforts in seeking regulatory approval from Bank Negara Malaysia (BNM) to initiate deal discussions with Generali Asia. Generali Asia, a subsidiary of Italy-headquartered Generali Group, holds a 49% stake in joint venture MPI Generali.

The capital management firm previously submitted an approval application to BNM on June 18 to start new divestment negotiations with Generali Asia. MPHB’s June application noted they were looking to dispose of a 21% stake to the insurer. However, BNM has not yet responded to MPHB’s earlier submission. A spokesperson for Generali told InsuranceAsia News (IAN) that their outlook on Asian markets is “still positive — which is driven by the region’s high-growth markets.”

The Italian insurer continued: “We remain committed to our strategy of growing our business in markets where we are already present.  While economic growth has been impacted across the region, we believe that it will rebound faster in Asia in comparison to other parts of the world and contribute positively to Generali’s performance.”

In 2014, it was announced Generali Asia reached a deal with MPHB Capital — whereby the insurer received its 49% stake for Rm355.8 million (US$84.5 million). The deal allowed Generali Asia to enter Malaysia’s P&C market, “placing itself among the top ten [general] insurers of the country,” said an official statement. Generali meanwhile, has predicted a profit hit this year due to Covid-19 impacts — but will keep a close watch on M&A and other opportunities.

The company reported a robust first half result. “Like every other business, Covid-19 has [impacted our] Asia business operations. Despite the challenging circumstances, we [produced] a solid performance as shown by our H1 2020 financial results announced last week — [confirming] our strategy and business model,” said the spokesperson. Philippe Donnet, chief executive of Generali, said: “Our priority for M&A in the insurance sector is Europe; while we look at the United States and Asia in asset management.” Generali Asia currently operates in eight regional markets (China, Hong Kong, India, Indonesia, Malaysia, Philippines, Thailand and Vietnam), serving five million customers. It set-up in Asia in 1975.

Source https://insuranceasianews.com/mphb-capital-looks-to-divest-mpi-generali-stake/