In sync with its long term strategic plan to strengthen its presence in Malaysia, Sun Life Financial Inc.
(SLF - Free Report
) , last week launched its unit Sun Life Malaysia in the region.
Sun Life Malaysia has been formed of Sun Life Malaysia Assurance Berhad and Sun Life Malaysia Takaful Berhad, the renamed entities of CIMB Aviva Assurance Berhad, the life insurer in Malaysia and CIMB Aviva Takaful Berhad, a takaful company in Malaysia.
Sun Life Financial Inc. in alliance with Khazanah Nasional Berhad (Khazanah) had jointly acquired 98% of CIMB Aviva Assurance Berhad, and CIMB Aviva Takaful Berhad.
Sun Life Financial as well as Khazanah have each paid RM900 million for the deal. For the consideration, each of the companies has acquired 49% from Aviva International Holdings Limited and CIMB Group Holdings Berhad (CIMB Group), respectively. The remaining 2% will be retained by CIMB Group.
With the agreement, Sun Life Financial will obtain instant access to millions of customers of CIMB Bank. Presently the bank has a network of 312 branches and serves approximately 8 million customers. The agreement will give an exclusive right of distributing insurance as well as access to takaful products across Malaysia to Sun Life. Takaful is a Shariah-compliant alternative to an insurance scheme.
The transaction is a strategic step in the company’s objective to grow in the Asian region. The company has a significant presence in Hong Kong, the Philippines, Indonesia, India, China, Singapore and Vietnam. Sun Life is specifically focusing on the emerging economies of Asia, which is expected to provide higher return and growth compared to the North American markets. Historically, the company’s Asian operation represented an average of only 2-3% of the company’s consolidated earnings and premiums. However, management plans to drive 12.5% of consolidated operating earnings from Sun Life Asia by 2015.