The two firms are looking to get around $650m (£526.3m, €588.8m) from the sale of Axa Affin General Insurance and Axa Affin Life Insurance – for $500m and $150m, respectively.
Axa owns 49.99% of the general insurance business – one of the top medical and health insurers in Malysia – and 49% of the life arm.
The Kuala Lumpur-based bank and the French insurers are understood to be working with advisers on the potential sale.
But deliberations are currently at an early stage and both companies could backtrack.
International Adviser contacted Axa for confirmation, but the firm did not reply in time for publication.
An ongoing trend
Axa, however, is not the only foreign insurer looking to make substantial changes to its Malaysian operations.
Companies such as Prudential and Zurich have reportedly started looking at selling stakes in their respective businesses after the Malaysian government started enforcing its 70% foreign ownership cap.
Rumours are also circling that Aviva is eyeing the sale of its Asia business, which operates across six countries; China, Hong Kong, India, Indonesia, Singapore and Vietnam.