Australia's IAG to sell Thai, Indonesia units to Tokio Marine for $390 million

Insurance Australia Group (IAG) said on Tuesday it will sell its Thai and Indonesian operations to Japanese insurer Tokio Marine Holdings or A$525 million ($390 million).

The Japanese company’s unit, Tokio Marine & Nichido Fire Insurance, will buy IAG’s 98.6 percent stake in Thailand’s Safety Insurance and 80 percent of PT Asuransi Parolamas in Indonesia.

“We believe Tokio Marine is an ideal owner given its experience in the region, and that this is a good outcome for the associated employees, customers and other stakeholders,” IAG Chief Executive Peter Harmer said in a statement.

IAG said in February it was reviewing its Asian operations as it faced a lack of buying opportunities to boost growth in a competitive region attractive for its low penetration rates.

Separate to the Tokio Marine deal, IAG said it has also agreed to sell its 73.07 percent stake in Vietnam-based AAA Assurance Corp. It did not give more details on the deal.

IAG said it would record an after-tax profit of at least A$200 million in its fiscal 2019 results from the combined transactions, after certain deductions.