TOKIO MARINE HOLDINGS, INC. June 19, 2018
Tokio Marine Holdings, Inc.
Tokio Marine acquires IAG's Thailand and Indonesian businesses to become a leading insurer in Thailand
Tokio Marine Holdings, Inc. (President and Group CEO: Tsuyoshi Nagano) today announced that it has entered into a definitive agreement to acquire Thailand and Indonesia insurance businesses of Insurance Australia Group Limited ("IAG") which predominantly comprises of Safety Insurance Public Company Limited ("Safety") in Thailand. The total consideration is approximately 525
Million Australian Dollars (approximately 42.8 Billion Yen)1. The transaction enables Tokio Marine to be among the Top 3 P&C insurer in Thailand with the 2nd market position in motor.
These acquisitions are expected to be completed in sequence subject to regulatory procedures required in respective countries.
1. Background of the acquisition
(1)Tokio Marine Group has been focused on expanding its international business as the driving force of the Group`s growth strategy. Tokio Marine Group is aiming to pursue strategic M&A initiatives in both developed and emerging markets to achieve this objective.
(2) In the developed markets we have significantly expanded our presence through a series of acquisitions starting from acquisition of Kiln in 2008 and the latest being acquisition of HCC in 2015.
(3) With respect to Asia and other emerging markets, its present contribution to the total profit of our international business remains at around 10%. We aspire to significantly expand our business in these markets with high growth potential through acceleration of our strategic M&A initiatives to achieve further diversification of our global portfolio, which is stated as one of the key initiatives of our current Mid-Term Business Plan "To Be a Good Company 2020" announced in May 2018.
1 Total consideration is subject to closing adjustment. FX date: the end of Mar 2018(AUD/JPY exchange rate:¥81.6)
2. Overview of the acquisition
Company name | Safety Insurance Public Company Limited (Safety) | PT Asuransi Parolamas (Parolamas) |
Main location | Bangkok, Thailand | Jakarta, Indonesia |
Established | 1941 | 1964 |
Paid up Capital | THB 377 Million (JPY 1.3 Billion) | IDR 192,000 Million (JPY 1.5 Billion) |
Gross Written Premium (FY2017) | THB 9,159 Million (JPY 31.1 Billion) | IDR 18,081 Million (JPY 0.2 Billion) |
Profit after Tax (FY2017) | THB 136 Million2 (JPY 0.5 Billion) | IDR ▲32,708 Million (JPY ▲0.2 Billion) |
Number of employees （as of Dec 2017） | 1,281 employees | 126 employees |
IAG's ownership | 98.6% | 80% |
Business model |
|
|
FX Date: the end of Mar 2018(THB/JPY exchange rate: ¥3.4, IDR/JPY exchange rate: ¥0.0077)
3. Transaction structure
TMNF to acquire outstanding shares of Safety and Parolamas held by IAG in cash.4
2 2013-2017 Profit After Tax average is THB 347 Million (JPY 1.2Billion).
3 All of rankings are based on Direct Written Premium (FY 2017).
4 TMNF intends to acquire 20% held by minority shareholders.
4. Funding
Cash on hand (no debt / equity financing).
5. Strategic rationale of this transaction
The combination of Safety and TMITH will create the third largest P&C insurer with 8% market share (the largest among the foreign owned insurers) and the second largest motor insurer in Thailand, which is the largest P&C insurance market among the South East Asian countries. We aspire to contribute to the development of the Thai insurance market and further profitable growth of our international business by implementing the following:
• With the scale, strong brand recognition and extensive distribution and claim service network of the combined operations, we aim to further enhance our market presence across Thailand.
• Safety's business portfolio complements TMITH existing business whose core strength is in commercial lines. The combination of the two operations will enable Tokio Marine Group to offer variety of high quality products and services with high quality meeting the needs of wide range of clients in both personal and commercial sectors.
• Various synergies are expected to be generated through initiatives such as cross-selling Tokio Marine group companies' specialty insurance products through Safety's nationwide distribution channels, and utilizing Safety's expertise and infrastructure to enhance Tokio Marine Group's overall claim servicing quality and efficiency in Thailand.
Overview of the Tokio Marine Group companies
Company name | Tokio Marine Insurance Thailand Public Company Limited (TMITH) | PT Asuransi Tokio Marine Indonesia (TMI) |
Main location | Bangkok, Thailand | Jakarta, Indonesia |
Established | 19465 | 1975 |
Paid up Capital | THB 3,720 Million (JPY 12.6 Billion) | IDR 100,000 Million (JPY 0.8 Billion) |
Gross Written Premium (FY2017) | THB 7,999 Million (JPY 27.2 Billion) | IDR 1,270,585 Million (JPY 9.8 Billion) |
5 The year when former company Hua Sieng was established. Tokio Marine acquired equity shares in 1971.
Profit after Tax (FY2017) | THB 655 Million (JPY 2.2 Billion) | IDR 107,804Million (JPY 0.8 Billion) |
% of Tokio Marine Group shares | 99.96% | 60% |
Number of employees （as of Mar 2018） | 777 employees | 349 employees |
Business model |
|
|
FX Date: the end of Mar 2018(THB/JPY exchange rate: ¥3.4, IDR/JPY exchange rate: ¥0.0077)
6. Overview of P&C Insurance Markets in South East Asia6
(1) Thailand
Population | 69 Million |
# of companies (domestic / foreign) | 60 (domestic 37/ foreign 23) |
Market Size | Approximately JPY 720 Billion |
Major Line of Business | Motor (60%), Personal Accident (13%) |
2013-2017 CAGR | 2% |
2018-2028 CAGR (Forecast) | 8% |
(2) Indonesia
Population | 264 Million |
# of companies (domestic / foreign) | 76 (domestic 55/ foreign 21) |
Market Size | Approximately JPY 460 Billion |
Major Line of Business | Motor (29%), Property (29%) |
2013-2017 CAGR | 9% |
2018-2028 CAGR (Forecast) | 12% |
6 Source：Swiss Re Insight (2017)
(3) Singapore
Population | 6 Million |
# of companies (domestic / foreign) | 62 (domestic 5/ foreign 57) |
Market Size | Approximately JPY 320 Billion |
Major Line of Business | Motor (30%), Property (13%) |
2013-2017 CAGR | 1% |
2018-2028 CAGR (Forecast) | 4% |
(4) Malaysia
Population | 32 Million |
# of companies (domestic / foreign) | 22 (domestic 11/ foreign 11) |
Market Size | Approximately JPY 470 Billion |
Major Line of Business | Motor (49%), Property (19%) |
2013-2017 CAGR | 2% |
2018-2028 CAGR (Forecast) | 7% |
(5) Vietnam
Population | 95 Million |
# of companies (domestic / foreign) | 30 (domestic 16/ foreign 14) |
Market Size | Approximately JPY 200 Billion |
Major Line of Business | Motor (33%), Personal Accident (27%) |
2013-2017 CAGR | 15% |
2018-2028 CAGR (Forecast) | 14% |
(6) Philippines
Population | 105 Million |
# of companies (domestic / foreign) | 64 (domestic 53/ foreign 11) |
Market Size | Approximately JPY 180 Billion |
Major Line of Business | Motor (33%), Property (32%) |
2013-2017 CAGR | 15% |
2018-2028 CAGR (Forecast) | 11% |
(FX Date: the end of Mar 2018(THB/JPY exchange rate: ¥3.4, IDR/JPY exchange rate: ¥0.0077, SGD/JPY exchange rate: ¥81.0, MYR/JPY exchange rate: ¥27.5, VND/JPY exchange rate: ¥0.0047, PHP/JPY exchange rate: ¥2.0)
Attachments
- Original document
- Permalink
Disclaimer
Tokio Marine Holdings Inc. published this content on 19 June 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 June 2018 23:27:01 UTC
