French insurer AXA SA and Affin Bank Bhd are exploring options including a potential sale of their life and general insurance business in Malaysia that could fetch about US$650mil, according to people with knowledge of the matter.

Kuala Lumpur-based Affin Bank and AXA are working with advisers on the potential deal, said the people, who asked not to be identified as the information is private.

The financial firms are seeking around US$500mil on AXA Affin General Insurance Bhd., while they are looking to raise as much as US$150mil from AXA Affin Life Insurance Bhd in a transaction.

Deliberations are at an early stage and the companies could decide to keep their holdings in the Malaysian business, the people said. A representative for AXA declined to comment, while a representative for Affin Bank didn’t immediately respond to requests for comment.

Affin and AXA could be joining owners of AmGeneral Insurance Bhd. as well as other foreign players including Prudential Plc and Zurich Insurance Group AG in seeking to pare stakes in their Malaysian units, after the government decided to start enforcing ownership cap more strictly.

AXA Affin General Insurance is among the top medical and health insurers in Malaysia, with 5,000 agents across the nation. The company underwrote 1.44 billion ringgit ($341 million) in gross earned premiums and posted a net income of 100 million ringgit in 2018, according to its latest annual report.

AXA Affin Life Insurance, set up in 2006, earned gross premiums of 463.4 million ringgit in 2018, down from 490 million ringgit a year earlier, its annual report shows. The company’s losses narrowed to 8.1 million ringgit from 17.7 million a year ago.

AXA owns 49.99% of the Malaysian general business operations, while Affin Bank holds 49.95%, according to AXA’s website. In AXA Affin Life, Affin controls 51% and the rest belongs to the French insurer. – Bloomberg