AMG INSURANCE BERHAD TO ACQUIRE KURNIA INSURANS (MALAYSIA) BERHAD

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AmBank Group will become No.1 in General and Motor Insurance

- AmG Insurance Berhad to acquire Kurnia Insurans (Malaysia) Berhad for RM1.55

billion

- Creating Malaysia’s largest general insurer with over RM1.7 billion gross

written premium

- Customers and business partners to have access to AmBank Group’s distribution

channels and full suite of financial products / services

KUALA LUMPUR, April 12 (Bernama) -- AMMB Holdings Berhad (AMMB or AmBank Group)

announced today that following the approval of the Minister of Finance, AmG

Insurance Berhad (AmG), a 51%-owned subsidiary of AMMB, has entered into a

conditional sale and purchase agreement with Kurnia Asia Berhad (KAB) for the

proposed acquisition of a 100% equity interest in Kurnia Insurans (Malaysia)

Berhad (Kurnia).

Tan Sri Azman Hashim, Chairman of AMMB and AmG, commented, “This acquisition

will position us to deliver on AmG’s strategic objective of being among the top

three domestic general insurers. The combined businesses of AmG and Kurnia will

emerge as the largest domestic general insurer and the market leader in motor

insurance.”

The proposed acquisition of Kurnia is for a total cash consideration of RM1.55

billion. This purchase price is arrived after taking into consideration a

valuation by AmG of Kurnia’s business, the net profits and net assets of Kurnia,

and potential synergies.

The cash purchase price for the Proposed Acquisition will be funded by AmG

entirely with capital funds to be injected proportionally by its shareholders

(51% by AMMB and 49% by Insurance Australia Group Limited (IAG), AMMB’s

strategic partner in AmG).

Mr Justin Breheny, Chief Executive Officer of IAG’s Asia division, said, “The

Kurnia business is a good strategic fit to AmG, with a shared vision and

commitment to grow and be the leading motor insurer. The acquisition also

increases the resilience and competitiveness of AmG-Kurnia for the challenges

and opportunities that future industry consolidation and market liberalisation

will bring about.”

On a combined basis, AmG-Kurnia will emerged as the Number 1 general insurer

(about 13% market share) and motor insurer (about 22% market share) in Malaysia

by gross written premium

Mr Ashok Ramamurthy, Group Managing Director of AMMB added, “There are

substantive cost synergies and supply chain operational efficiencies from the

enlarged scale, which will benefit our customers and business partners.

Additionally, the three (3) million policyholders of Kurnia is a ready pool of

customers for cross-selling opportunities of AmBank Group’s other financial

products and services, such as banking and fund management, through our

extensive distribution footprint.”

“AmG, as a member of AmBank Group, currently has access to a strong

bancassurance distribution channel, with an agency distribution force of 2,900.

With Kurnia’s 5,500 strong agency forces through a network of 30 branches, the

combined operation will have a well diversified distribution network. For now

both AmG and Kurnia businesses will continue to run as they are and it is very

much ‘business as usual’,” said Duncan Brain, Chief Executive Officer of AmG.

Post acquisition, both the AmAssurance and Kurnia brands will continue to be

used, and most of the integration process is expected to occur over a period of

two years after the acquisition, within which the value accretion from the

proposed acquisition would be realised.

“This acquisition complements AmBank Group’s Medium Term Aspiration and

strategic priorities to grow income from profitable segments. It will accelerate

our recurring non-interest income growth and provide cross-selling benefits. We

are excited about this acquisition and the value creation this will bring to our

various stakeholders and customers,” Tan Sri Azman concluded.

About AmG Insurance Berhad

AmG is a general insurance business which trades under the AmAssurance brand,

and is 51% owned by AmBank Group and 49% by IAG. It was formerly part of the

composite insurance (life and general) operation of AmBank Group which was

separated in December 2008, with AmG assuming the general insurance business. It

is Malaysia’s fourth largest motor insurer and the eighth largest general

insurer by gross written premium as at 31 December 2011. It has an extensive

distribution network made up of AmBank Group’s 190 bank branches and its own 19

branches and 2,900 insurance agents, and serves approximately one million

policyholders.

About Insurance Australia Group

Insurance Australia Group Limited is the parent company of an international

general insurance group, with operations in Australia, New Zealand, the United

Kingdom and Asia. Its current businesses underwrite over A$8 billion (RM25.6

billion) of premium per annum, selling insurance under many leading brands

including NRMA Insurance, CGU, SGIO, SGIC, Swann, Buzz Insurance (Australia);

NZI and State (NZ); Equity Red Star (UK); and Safety and NZI (Thailand). For

further information, please visit www.iag.com.au

About Kurnia Insurans (Malaysia) Berhad

Kurnia commenced operations in 1991 and is licensed under the Insurance Act 1996

to conduct general insurance business. As at 31 December 2011, it ranks as the

fourth largest general insurer in Malaysia by gross written premium with about

8% market share, and is the largest motor insurer with about 14% market share.

SOURCE : AMBANK GROUP

For investor and analyst enquiries, contact:

Name : Ganesh Kumar Nadarajah

Group General Manager, Group Investor Relations & Planning

Tel : 603 – 2036 1435; 6012 – 2974 799

Email : ganesh-kumar@ambankgroup.com

For media enquiries, contact:

Name : Syed Anuar Syed Ali

Head, Group Corporate Affairs

Tel : 603 – 2036 1703

Email : sasa@ambankgroup.com

--BERNAMA

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