Ace Ltd., which has been looking to invest in the Malaysian insurance market for some time, has bought general insurer Jerneh Insurance Bhd, according to wire reports yesterday.

Industry sources said that the Switzerland-based insurer had agreed the deal following ongoing discussions between Jerneh's owners - Jerneh Asia Bhd., which holds an 80 percent stake, and Paramount Corp., which owns 20 percent - and potential buyers since last year.

The deal is still subject to approval from Bank Negara, but analysts said the transaction was in line with plans to further liberalise the financial sector and encourage consolidation in the insurance industry.

"Ace is hotly tipped to be the new owner of Jerneh Insurance. The company has been keen to invest in Malaysia for some time," the source said on Sunday.

Shares in both Jerneh Asia and Paramount Corp. were suspended from trading at midday yesterday pending an announcement.

Jerneh Insurance provides a range of general insurance products including fire, marine, aviation, motor, engineering, household, and accident and health insurance. It has 19 branches in Malaysia.

Ace currently has a 51 percent stake in Malaysia's Ace Synergy Insurance Bhd. that offers general insurance and reinsurance. In 2008, Ace wanted to exercise a call option to fully own Ace Synergy Insurance for RM117 million, but this was opposed by Ascap.

Ace has been linked to several acquisition attempts recently, including Multi Purpose Insurance Bhd and, in 2008, The Pacific Insurance Bhd.

The Malaysian government raised the limit on foreign shareholding in local companies to 70 per cent from 49 per cent in April last year.

Italy's Assicurazioni Generali SpA, the UK's HSBC group and South Korea's Samsung Fire and Marine Insurance were the other leading contenders linked with acquiring the stake in Jerneh Insurance.

Ace declined to comment on the matter.