Sompo Japan said to near bancassurance agreement with CIMB
SINGAPORE, April 13 — Sompo Japan Nipponkoa Holdings Inc is nearing an agreement with CIMB Group Holdings Bhd to distribute general insurance products through the Malaysian lender’s branches across Asia, people with knowledge of the matter said.
Japan’s third-largest general insurer could pay about US$200 million (RM774.5 million) to CIMB under the proposed deal, according to the people, who asked not to be identified because the information is private. The so-called bancassurance agreement would allow Sompo to distribute products through CIMB outlets for more than 10 years, the people said.
Sompo would be displacing Munich-based Allianz SE, which has a 10-year insurance partnership with the Malaysian lender that started in 2007. CIMB, led by Chief Executive Officer Tengku Zafrul Abdul Aziz, has been cutting jobs to reduce costs amid a downturn in its regional business.
Sompo shares rose as much as 4.4 per cent in Tokyo trading today, the most in more than a month.
There’s no certainty Sompo will reach a final agreement, and it’s possible details could change, according to the people. The deal is subject to internal approvals at the companies, the people said.
Sompo partners with Berjaya Group Bhd to offer general insurance in Malaysia through 22 offices. The company aims to boost profit and achieve sustainable growth through “disciplined investments” overseas, according to its website.
A spokesman for Sompo declined to comment. Representatives for CIMB didn’t immediately respond to e-mails and phone calls seeking comment.
CIMB agreed last month to sell its 51 per cent stake in an Indonesian life-insurance venture to partner Sun Life Financial Inc for RM169 million. Allianz, Axa SA and Sompo had made final bids for the bancassurance agreement, people with knowledge of the matter said in February. — Bloomberg