Friday, December 21, 2012

European financial institutions to invest in AAI

Indunil Hewage

FMO Senior Investment Officer Arno De Vette and DEG Investment Manager Thomas Kronsbein exchanges the agreements with Softlogic Holdings/ Asian Alliance Insurance Chairman Ashok Pathirage. Picture by Roshan Pitipana

Europe’s leading development financial institutions, Deutsche Investitions - Und Entwicklungsgesellschaft Mbh of Germany (DEG) and Netherlandse Financierings –Maatschappij Voor Ontwikkelingslanden N.V of Netherlands (FMO), yesterday signed an agreement with Asian Alliance Insurance (AAI), to invest in AAI . Consequent to this agreement, DEG and FMO would each also purchase 38% shares of AAI at a value of Rs 1.8 billion in the early part of next year.

AAI which undertakes both life and general insurance businesses in Sri Lanka, became part of Sri Lanka’s most diversified Softlogic Group in the latter part of 2011 and the well developed life insurance segment of the company, has posted a significant performance and had been ranked among the top five players in the industry as at September 2012.

Commenting on the signing, Softlogic Holdings and Asian Alliance Insurance Chairman Ashok Pathirage, said that the company was drawing a comprehensive general insurance strategy which would be complemented by the other sectors of the Softlogic Company. We have been evaluating eligible international partners to share the ownership of AAI and we are very much delighted to partner with DEG and FMO. Our strategic collaboration with DEG and FMO would enable AAI to access international expertise and strategy, thereby providing immense benefits to all our stake holders.

The value proposition being created in the General Insurance, has seen the doubling of revenue, compared to the previous year, with exciting prospects to be realized in Health insurance, with the Asiri Group of Hospitals owned by the Softlogic Group and the distribution of insurance solutions via the Softlogic retail network of over 150 stores, throughout the length and breadth of Sri Lanka.

 AAI was trying to forge new dimensions in the local insurance arena in the near future, which would definitely elevate the profile of the Asian Alliance Insurance.

Michael Bornmann , a member of DEG’s Management Board, mentioned that we were convinced that post-conflict Sri Lanka, has immense scope and the local insurance industry had great prospects in the medium term. We expect that the strong economy to deliver higher disposable income that in return would lead to significant demand for financial services, including insurance. We were also confident that this partnership would create an outstanding value in a number of areas.

AAI commenced its operations in Sri Lanka in December 1999 and today, the company has grown from strength to strength, to become one of Sri Lanka’s leading players in the insurance industry.

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