UK based RSA Insurance Group Plc announced that it has sold a 21.75 per cent holding in Thailand’s insurer Syn Mun Kong (SMK) to LeapFrog Thailand Holdings Ltd and Mindo Asia Investment Limited, an affiliate of US-based Lombard Investments Inc.
RSA received cash consideration of £36 million ($56.33 million) and the transaction is expected to result in a gain on sale of approximately £22 million ($34.44 million) and an addition to the group’s tangible net assets of approximately £19 million ($29.73 million).
Stephen Hester, RSA group chief executive, said in a company statement that this transaction continues the excellent momentum of its announced disposals in 2014 and represents further progress in tightening the strategic focus of the group.
SMK is Thailand’s second largest automobile insurer and fifth largest general insurer. Founded in 1951, SMK is well-placed to capture growth in Thailand where insurance penetration is low but market demand is accelerating.
The company’s general insurance operations include specialised health, personal accident, fire, marine and transportation insurance offerings.
Thailand’s population is around 67 million people, and represents an under-penetrated automotive insurance market now growing at an average rate of 18 percent per year between 2009 and 2012, according to the company statement.
“SMK is an outstanding family business with a demonstrated track record of growth and profitability. We believe the combined skills of Lombard and LeapFrog can help SMK achieve higher levels of performance,” said Lombard Investments managing director Pote Videt.