KUALA LUMPUR (Aug 24): MNRB Holdings Bhd (KL:MNRB) is a step closer to acquiring Labuan Reinsurance Ltd after the central bank’s approval for the deal.
The proposed acquisition of the offshore reinsurer also known as Labuan Re has received approval from Bank Negara Malaysia through an Aug 21 letter, MNRB said in an exchange filing on Monday. However, the deal is still subject to necessary approval from the Labuan Financial Services Authority.
In May, MNRB announced that it is planning to buy the remaining 80% stake in Labuan Re for US$100.69 million (RM400.49 million) cash as it seeks to fully consolidate the business and strengthen the group’s regional reinsurance and retakaful platform.
Meanwhile, MNRB is in the midst of selling its takaful business to development financial institution Bank Kerjasama Rakyat Malaysia Bhd, better known as Bank Rakyat, for RM1.64 billion cash.
The acquisition and disposal at MNRB come at a time when the global reinsurance market is entering a ‘softening cycle’ — characterised by abundant capital, falling premium rates, and intense competition as reinsurers are eager to underwrite more business.
If the deals go through, MNRB can sharpen its focus on reinsurance and retakaful while concentrating in Asia-Pacific where the company has said opportunities remain “abundant for diversified yet profitable growth”.