TOKYO -- Japan's Tokio Marine Holdings will acquire the Thai and Indonesian units of Insurance Australia Group, seeking to extend its business in Southeast Asia to the region's growing middle class.

Tokio Marine & Nichido Fire Insurance will buy IAG's 98.6% stake in Thailand's Safety Insurance for just over 40 billion yen ($362 million). The deal, which will also include a majority interest in small Indonesian insurer Asuransi Parolamas, is expected to be completed as early as this year after receiving regulatory approval in the relevant countries.

Nonlife insurance premiums in six members of the Association of Southeast Asian Nations totaled $23.41 billion in 2016, with Thailand ranking as the largest single market there at $6.91 billion, data from reinsurer Swiss Re shows. Though these figures look small compared with developed nations, several ASEAN markets enjoy annual growth of 5% to 10%. American insurer AIG, France's Axa and Germany's Allianz have expanded operations in the region, while MS&AD Insurance Group Holdings has outpaced its Japanese peers there.

Tokio Marine has built up its overseas presence through major deals in the U.S. and Europe, such as its 2015 acquisition of HCC Insurance Holdings of Texas, and now earns a large portion of its profits abroad. With the Safety Insurance acquisition, it aims to bolster its operations in Southeast Asia,which is now mostly limited to dealing with Japanese companies doing business in the region.

Safety Insurance reported about 350 million Australian dollars ($260 million) in premium income for the fiscal year ended in June 2017, ranking eighth in the Thai market. It boasts a nationwide network of roughly 5,000 agencies, with consumer auto insurance among its strengths. Tokio Marine plans to combine the company with its own local unit, which would lift it to third place overall and first among foreign-owned nonlife insurers.