AIA Group has bought ING’s Malaysian life business for $US1.73 billion ($1.64 billion).

The deal also includes ING’s employee benefits business and a 60% stake in ING Public Takaful Ehsan, which is a joint venture with Malaysia’s third-largest bank, Public Bank, and one of its top five Islamic banks, Public Islamic Bank.

The purchase makes AIA the largest life insurer in Malaysia based on total premiums. It will gain 9200 agents in the country and 1.6 million customers.

ING has been forced to sell its Asian life business – including operations in Hong Kong, Japan and South Korea – under the terms of a European Union bailout deal.

“[The Malaysian sale] is the first major step in the divestment of our Asian insurance and investment management businesses,” ING Group CEO Jan Hommen said. “It shows ING continues to make steady progress in the restructuring of our company.”

ING expects the sale to deliver a net gain of about €780 million ($982 million).

Meanwhile, AIA has reported a 22% increase in new business, to $US300 million ($292 million), for the third quarter ending August 31. Annualised new premium income rose 17% to $US960 million ($934 million).

AIA Group CEO Mark Tucker says the insurer is having an outstanding year.

“The achievement of our highest quarterly value of new business is indicative of the strong momentum we have established and the significant progress we continue to make in the execution of our sustainable growth strategy,” he said.

“As the largest independent pan-Asian insurance company we are incredibly well placed to continue to benefit from expanding demand for long-term savings and protection products in Asia-Pacific.”