KUALA LUMPUR (Aug 25): US insurance company Chubb Ltd has scrapped the planned listing of its Malaysian unit, according to people familiar with the matter.
Advisers were working on the initial public offering (IPO) of Chubb Insurance Malaysia Bhd as a means to comply with the regulator’s mandate for foreign insurers to pare down their stakes in their local units, and the company is now exploring other options, two people told The Edge.
“Chubb will have to look at some other options…market conditions are just not right,” one of the persons said.
Any future attempt to list Chubb Insurance Malaysia, a general insurer focusing on property and casualty insurance, would require a fresh application and a complete restart of the regulatory process.
Chubb did not respond to The Edge’s request for comment. Maybank Investment Bank, the principal adviser for the IPO, did not provide a comment.
The IPO would have involved an offer for sale of existing shares amounting to a 30% stake in the company. The company itself was not raising any fresh funds, meaning that the entire proceeds will go to its US shareholder.
Many international insurers started their operations in Malaysia with wholly owned subsidiaries decades ago on the promise that they would eventually comply with a rule that limits foreign shareholdings.
Bank Negara Malaysia, 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, however, expects foreign insurers to honour the commitment made during their licence applications.
Chubb Insurance Malaysia has been in Malaysia since 1970, and the company acquired what was then known as Jerneh Insurance Bhd in 2010 from tycoon Robert Kuok.