Ace Cleared to Acquire Jerneh Insurance in Malaysia

Ace Group said it has been cleared to acquire Jerneh Insurance Bhd. for a proposed price of about US$200 million, approved by Bank Negara Malaysia, the country's central bank and financial regulator.

Jerneh Insurance is majority owned by Jerneh Asia Bhd., an investment holding company listed on the Kuala Lumpur Stock Exchange. The transaction is expected to be completed in the fourth quarter of 2010.

"This transaction provides a good strategic fit and complements our current presence in Malaysia," said Evan G. Greenberg, chairman and chief executive of Ace Ltd., in a statement.

Ace already has a presence in Malaysia's non-life sector with a 51% share in Ace Synergy Insurance Bhd., a joint venture with Advance Synergy Capital Bhd., which holds the remaining 49%. The insurer offers non-life products through brokers, agents, telemarketing and direct marketing.

"The addition of Jerneh Insurance Bhd. will be accretive to Ace's earnings and book value per share and will meet our return-on-capital hurdle rate," Greenberg said.

Jerneh Insurance reported gross premium income of 433 million ringgit (US$139 million) in 2009, up from 354 million ringgit a year earlier. Its pretax profit was 69 million ringgit in 2009, up from 23 million ringgit in 2008, according to Jerneh Insurance's financial statement.

Though established to manage the in-house insurance needs of Kuok Group, parent company of Jerneh Asia, Jerneh Insurance is now a specialist in marine, industrial and engineering lines.

In addition, Jerneh provides non-life products in fire, aviation, motor, household, accident and health insurance. It also has the capacity to write large projects in Malaysia, Singapore, Indonesia, the Philippines, Myanmar, Thailand, Hong Kong, China and Australia.

(By Iris Lai, Hong Kong bureau manager: Iris.Lai@ambest.com)