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IAG, which helds a 30 percent interest in AmAssurance, said the increase in its interest was in line with its strategy to strengthen its position in select Asian general insurance markets, the Australian Associated Press reports.

The move follows an announcement last week by IAG that it had entered into an agreement with the State Bank of India (SBI) for a general insurance venture.

IAG said the Malaysian restructure would be effected by splitting AmAssurance into general insurance and life insurance components.

IAG will then sell its 30 percent interest in the life insurance business and increase its interest in the general insurance business to 49 per cent - the maximum allowable under Malaysia's foreign investment rules, the report said.

IAG said the restructure would result in a net profit of about A$35 million (RM112 million) on the sale of the 30 per cent interest and IAG's overall investment in Malaysia would increase by around A$20 million. The business will be renamed AmG Insurance (AmG) and will retain the right to use the AmAssurance brand.

IAG chief executive Justin Breheny said IAG was pleased with the performance of the company since its initial investment.

"During the 2008 financial year, the joint venture's general insurance gross written premium (GWP) increased by 15 per cent in local currency terms, and we anticipate continued growth in excess of 10 per cent for the next few years," Breheny was quoted as saying.

Breheny said IAG plans to grow the AmG business and strengthen its underwriting performance through further penetration of the joint venture's distribution network and diversification of its product portfolio.

The restructure, which has received regulatory approvals, is expected to be completed in December.

Meanwhile, AmG has signed a memorandum of understanding (MoU) to acquire the general insurance business of Malaysian Assurance Alliance Bhd (MAA), in a move which would make AmG a top three general insurer in Malaysia by GWP, IAG said.

AmG is also set to acquire a strategic 4.9 per cent interest in MAA's Islamic insurance business, MAA Takaful Bhd. - Bernama

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