IAG is still reviewing its holdings in Malaysia and India after agreeing to sell operations in Thailand, Indonesia and Vietnam in two separate deals.

As reported in a Breaking News bulletin last week, Tokio Marine & Nichido Fire Insurance will pay about $525 million for IAG’s 98.6% stake in Safety Insurance in Thailand and its 80% interest in Indonesia’s PT Asuransi Parolamas.

“We believe Tokio Marine is an ideal owner, given its experience in the region, and this is a good outcome for the associated employees, customers and other stakeholders,” IAG CEO Peter Harmer said.

IAG has also agreed to sell its 73% interest in Vietnam-based AAA Assurance Corporation to a company with interests in the country.

The transactions are expected to conclude next financial year, subject to approvals, and contribute at least $200 million to after-tax profit.

IAG said in February it would review its Asian operations, which also include a 26% interest in a State Bank of India joint venture and a 49% holding in Malaysia’s AmGeneral.

“The review is ongoing until the end of the year,” a spokesman told insuranceNEWS.com.au. “Our operations in India and Malaysia are part of the strategic review.”

The Asia business contributed a profit of $15 million in the first half, but made an underwriting loss of  $6 million.

IAG says removal of Thailand, Indonesia and Vietnam from continuing businesses will lift reported insurance margin guidance by about 50 basis points this financial year, and improve the capital position.

“We have been calling for the disposal of the Asian operations and to redeploy valuable capital to the highly profitable Australia and New Zealand businesses,” Morningstar analyst David Ellis says in a note.

“The boost to group capital ratios and insurance profit margins is a key reason behind our argument IAG should have disposed of the under-performing businesses sooner.”

IAG says proceeds from the Thailand, Indonesia and Vietnam sales will be a factor in deciding capital management initiatives, with more details to be given at the August results announcement.