Hong Kong tycoon Richard Li is poised to buy American International Group Inc.’s Fuji Life Insurance Co. business, a deal that marks his FWD Group’s first foray into Japanese insurance.

AIG will continue to offer property/casualty coverage in the Asian country, the New York-based company said Monday in a statement announcing the sale, without disclosing terms. The agreement marks FWD’s entry into Japan since its 2013 founding, according to the statement.

The purchase for Li, son of billionaire Li Ka-shing, expands an insurance business that operates in Hong Kong, Macau, Singapore and Southeast Asia, and boasts more than 1.2 million customers. Meanwhile, AIG Chief Executive Officer Peter Hancock has been selling assets to simplify his company and free up funds for share repurchases. He reached a deal in August to sell a mortgage guarantor to Arch Capital Group Ltd. for $3.4 billion.

The deal with FWD “removes a distraction, a drag on earnings and a drag on capital, so it really allows us to concentrate,” Hancock said in an interview. Li’s company has “good knowledge of our people, they have a couple who are AIG staff on their team so they are quite familiar with the property, and it fits their portfolio quite well.”

Li has worked with AIG in the past. In 2010, his firm acquired an asset manager, PineBridge Investments, from the insurer, which was selling assets to repay a government bailout. He expanded into insurance two years later by adding units in Hong Kong, Macau and Thailand from ING Groep NV, which had also suffered from the recession. This year, FWD expanded in Vietnam through agreeing to buy a business from Great Eastern Holdings Ltd.

Carl Icahn

AIG has been in talks with Li’s firm since the middle of last year about the Japanese life unit, though the firms have been in constant discussions on a range of potential opportunities since the PineBridge deal, Hancock said.

Fuji Life represents less than 10 percent of the employees of AIG’s Japan unit, with about 1.1 million policies in force. Annualized new premiums amounted to $124 million in 2015, up from $83 million three years earlier.

“Our partnership with AIG will give FWD access to an extensive distribution network with an established customer base,” FWD CEO Huynh Thanh Phong said in the statement.

Activist Carl Icahn won representation to AIG’s board this year after pressuring the firm to improve returns. He said in August that he would have liked to see a sale of some of the Japan business. AIG last year noted prolonged delays in integrating its units in the region, AIU and Fuji Fire & Marine — a snag that kept the insurer from participating in a wave of unprecedented deal making in the industry.

Leaner Business

AIG finished acquiring Fuji Fire & Marine in 2011. The insurer will keep operating through its local subsidiaries of that business, AIU and American Home Assurance Co., according to the release. Japan is the largest personal insurance market globally for AIG based on net premiums written.

Hancock has also announced agreements to exit a broker-dealer unit and a Lloyd’s of London operation.

“Like other actions we’ve taken this year, the sale of AIG Fuji Life makes us a leaner insurer that’s better focused on the geographies and segments where we have the critical mass and expertise to provide tremendous value to our clients,” Hancock said in the statement.