KUALA LUMPUR (Nov 17): Chubb Insurance Malaysia Bhd, the local unit of US insurance company Chubb Ltd, is preparing for a listing on the Main Market.
The proposed initial public offering (IPO) will comprise an offer for sale of existing shares amounting to a 30% stake in the company, according to its draft prospectus published on Monday. The company itself is not raising any fresh funds, meaning that the entire proceeds will go to its US shareholder.
The IPO will allow the American insurer to comply with Bank Negara Malaysia’s mandate for foreign insurers to pare down their stakes in their local units.
Many international insurers started their operations in Malaysia with wholly owned subsidiaries decades ago on the commitment that they would eventually comply with a rule that limits foreign shareholding.
Bank Negara, which regulates the insurance sector, last raised the foreign shareholding limit to 70% in 2009 from 49% while granting exemptions on a case-by-case basis since then.
The central bank has reminded foreign insurers that they are expected to honour their commitment during their licence applications.
Chubb Insurance has been offering general insurance in Malaysia since 1970, and the company acquired what was then known as Jerneh Insurance Bhd in 2010 from tycoon Robert Kuok.
In 2024, net profit fell 38% to RM73.76 million on higher claims and other operating expenses while investment income fell on the back of a decline in net fair value gains on financial assets. Revenue, however, rose 1.8% to RM703.5 million, mainly due to higher number of policies underwritten.
The company said it is targeting a dividend payout ratio of 20% of profit after tax.
The proposed IPO involves an institutional offering of 249.55 million shares and a retail offering of 50.43 million shares at a price to be determined later. The final retail price will be the lower of the retail price or the institutional price.
Maybank Investment Bank is the principal adviser, sole bookrunner, sole underwriter and sole placement agent for the exercise.