AmAssurance Surrenders Composite Licence

AmAssurance will surrender its composite insurance licence from 1 December 2008 with creation of 2 separate entities: AmLife Insurance Berhad and AmG Insurance Berhad carrying out life insurance and general insurance respectively. AMAB Holdings Sdn Bhd is the new holding company for these 2 entities.

Meanwhile IAG will increase its holding in AmG from 30% to 49% and dispose off its 30% holding in AmLife to Friends Provident. The transaction prices are:

• 19% of AmG: RM141 mil
• 30% of AmLife: RM170 mil

Source: Bursa Malaysia

Kurnia's 2009 Q1 Results

Kurnia reported a mixed 2009 Q1 (30/9/2008) results, while the overall results have deteriorated, the underwriting performance has improved. Below are the 2009 Q1 vs 2008 Q1 figures:

• GI Revenue: RM304.5 mil vs RM290.2 mil
• Motor gross premium: RM236.2 mil vs RM238.2 mil
• Miscellaneous gross premium: RM31.7 mil vs RM18.1 mil
• Profit: -RM12.1 mil vs RM14.4 mil
• Underwriting surplus: RM2.7 mil vs -RM323.7 mil (2008 Q4)
• Investment activities: -RM8.0 mil vs RM34.9 mil
• Claims ratio: 68.0% vs 75.4%

Source: Bursa Malaysia

Hannover Re's Staff Died in Mumbai Attack

Hema Kasipillay, a Hannover Re's underwriter based in Kuala Lumpur, who had been missing since terrorists stormed the Taj Mahal Palace and Tower Hotel on Wednesday night, has been found dead in her room on level six of the hotel.

The postmortem revealed that she had died of smoke inhalation. Hema was in Mumbai to attend a conference. She was with 2 German colleagues who were evacuated. One was holed up in his hotel room for 13 hours before being rescued. The other one was at the business centre on the ground floor and was rescued after 6 hours.

It was Hema's 1st official trip to Mumbai. According to Ravinder Singh, Hannover Re's Deputy General Manager for South and South East Asia, he was in contact with Hema thru text messages for several minutes after the gunmen stormed the hotel. The line was cut off subsequently.

Source: The Star, iReport

ING registered strong growth

ING has registered 37% growth in new business weighted premium in 2008, contributed strongly by its single premium business, presumably as a result of bancassurance tie-up with Public Bank.

ING's other business targets and performance:

• Pre-tax profit target for 2008: RM277 mil (2007: RM286 mil)
• 11.3% market share up to Q2 2008, 3rd largest
• 43.6% market share in group business and employee benefits
• Premium target for 2008: RM770 mil
• May partner an existing local takaful player
• Possibility of "right-sizing" support functions to save costs

Source: Business Times 1 & 2, The Star

MNRB posts poor Q2 results

MNRB has reported a net loss of RM13.3 mil in Q2 or RM7.55 mil loss in H1 on higher revenue. Reasons of the poor performance are:

• Higher reinsurance claims due to disasters: heavy snowstorm and earthquake in China, floods in Jakarta, cyclone in Myanmar and storms in Europe
• Additional provision for diminution of investments in quoted securities

MNRB also dismissed rumours that its wholly-owned Takaful Ikhlas has attracted bids from three companies, as reported by the Malaysian Reserve.

Meanwhile, Takaful Ikhlas continues to deliver strong results with a net profit of RM6.35 mil, up from RM2.67 mil.

Source: The Star, Business Times

Kurnia to reduce reliance on motor insurance

Kurnia targets to reduce its reliance on motor insurance business. Motor insurance business currently contributes 84% of it gross premium income, the target is to reduce it to 50%.

Yesterday, Kurnia also re-launched its enhanced Kurnia Auto Assist (roadside breakdown repair, 30 minutes arrival at scene) and Kurnia Express (immediate settlement of claims of comprehensive motor policyholders up to RM3,000).

Source: Business Times

Reasons for Pru's Double-Digit Growth

Prudential enjoyed a double-digit growth in total new business premiums for the 1st 9 months of 2008 compared with the corresponding period in 2007. The reasons cited by Prudential are:

• Transformation of agency force to wealth planners
• Leveraging on technology, especially PRUway, a point-of-sales system
• Aggressive branding: "The Face You Can Trust"

Source: The Star

Agents see opportunities in times of crisis

Opportunities are aplenty even during times of crisis. The top agents of Hong Leong Assurance Berhad (HLA) certainly of no doubt about this. Some of the opportunities mentioned and some food for thought for aspiring agents out there:

• Protection is paramount in times of crisis
• Economic downturn is only temporary, financial planning is long-term
• Good time to recruit top-quality agents especially those who are retrenched or can't find a job

Source: The Star

Allianz pulls out from proposed acquisition of Tahan

Allianz announced that it has decided to discontinue the discussion and negotiation with Idaman Unggul Berhad on the proposed acquisition of Tahan Insurance Malaysia Berhad.

Source: Bursa

CIMB Aviva pulls out of most general insurance business lines

CIMB Aviva Takaful Bhd is pulling out of all motor and commercial lines business and will focus on personal accident and retail fire only, the 2 lines of business that have higher profit margin. For existing policies, the coverage will be provided until end of the contract period and presumably it will not be renewed thereafter.

The company also offers VSS and 200 out of 550 employees have accepted the offer.

Source: Business Times

Foreign parties interested in stake in Takaful Ikhlas

The Malaysian Reserve reported that 3 international insurers and an international bank are interested in acquiring a stake in Takaful Ikhlas. However, MNRB has not made a decision on the sale of a stake in Takaful Ikhlas yet. Takaful Ikhlas is looking for a foreign partner that can help it to expand overseas.

Source: Reuters

FRS 4 to take effect from Jan 2010

MASB today issued 3 new financial reporting standards (FRS) and 2 interpretations relating to financial instruments.

Among which, FRS 4 Insurance Contracts would be of interest to the insurance industry. FRS 7 Financial Instruments Disclosures would be relevant as well.

FRS 4 and FRS 7 will take effect from January 2010.

Source: The Star, MASB

AIG Injects Capital into Nan Shan

AIG has injected US$1.36 bil in fresh capital into Nan Shan Life Insurance Co.

We previously reported that AIG would sell stake in its 95% owned Nan Shan.

Source: CNN Money

PRUretirement Accumulator

Prudential launched a regular premium investment-linked product designed for retirement named PRUretirement Accumulator.

Product features:

Accumulation Phase

• Term of 5 to 40 years
• Minimum premium per month: RM100
• Withdrawal is allowed
• Top-up is allowed

Payout Phase

• Guaranteed monthly income
• Withdrawal is allowed
• Top-up is allowed?
  

Death and TPD cover is avaliable. Earlier this year, Manulife also launched an investment-linked retirement product call Secure Income Plus.

Meanwhile, Prudential UK has announced 5 to 10% cut in its maturity bonus.

Source: Bernama, Telegraph

No General Offer for MAA for the next 6 months

Tunku Ya'acob has changed his mind. He previously mentioned that he would "definitely consider doing a voluntary general offer for MAA Holdings if he could raise money".

Yesterday however he said that he would not be making any general offer for MAA Holdings within the next 6 months.

Source: Bursa Malaysia

Pay-as-you-drive Motor Insurance

If you use your car very infrequently, I think you would like the idea of pay-as-you-drive motor insurance policy.

In UK, you can have your motor insurance premium based on distance covered and the time of day or night you use your vehicle. This is achieved through a monitoring device called Coverbox which monitors your driving habits.

Actuaries would love this as well because it will provide very detailed data for them to improve on their pricing models.

Source: Insurance Daily

ING and Allianz do not need liquidity facility

Both ING and Allianz do not expect that they would need to draw down on the liquidity facility made available to insurers and takaful operators by BNM. Both have stated that their financial positions are strong and they do not face liquidity concerns.

Source: The Edge Daily

MAA signs MoU with AMG for disposal of units

MAA signed a non-binding MoU with AMG Insurance Berhad today to formalise discussions on the disposal of the General Insurance business of MAA to AMG for RM274.8 mil and 4.9% of MAA Takaful to AMG for RM16.2 mil.

The transactions are still subject to approval by various authorities including BNM and Ministry of Finance.

Source: Bursa Malaysia

AIG to sell Nan Shan

AIG is apparently renegotiating with the Government for a lower interest rate and possibly a higher loan package of $150 bil instead of $123 bil. The initial credit line by the Government has a 2-year term and an onerous interest rate above 10%.

Meanwhile, it was also reported that AIG would sell stake in the 95% owned Taiwan's Nan Shan Life Insurance.

Source: The Star 1, The Star 2, Alibaba

STMB to launch a range of products

Syarikat Takaful Malaysia Berhad (STMB) will launch a range of highly competitive takaful products by year-end, to commemorate its 25th anniversary in 2009.

Source: Business Times

MAA Shares Suspended (News Break)

MAA shares were suspended from trading this morning pending an announcement by the Company after 5pm which is "deemed material".

MAA shares surged close to 30% on Friday and another 11% this morning before suspension.

AM Bank Group was reported in Chinese daily that they would make an announcement this week on their takaful licence. We reported previously that AMAssurance was offered 10% of MAA Takaful. It is yet to see if MAA's suspension has anything to do with the divestment of their takaful licence.

Source: Bursa Malaysia

Fidelis Opposes Merger of Institute and Faculty

A group called Fidelis has been formed by actuaries who are against the merger of the 160-year-old Institutie of Actuaries and the 152-year-old Faculty of Actuaries. The merger was approved by members of both bodies 6 months ago. However, Fidelis claims that the joint councils of both bodies have not paid enough attention to the disadvantages and costs of the merger.

Source: The Herald

STMB Profit Adjusted Up RM4.6 mil

Syarikat Takaful Malaysia Berhad (STMB) has a positive adjustment to its previously released results by an amount of RM4.6 mil.

Unaudited profit: RM25.1 mil
+ Overprovision of service tax: RM8.2 mil
- Additional IBNR: RM2.7 mil
- Other adjustments: RM0.9 mil
= Audited profit: RM29.7 mil.

Source: Bursa Malaysia

Compesation Costs DBS up to S$80 mil

It will cost DBS Group S$70 mil to S$80 mil in compensating Lehman minibond investors in Singapore and Hong Kong.

Some facts:

• 3,300 investors in Hong Kong bought the product, amounting to S$257 mil.
• 1,400 investors in Singapore bought S$103 mil.

DBS admitted that there were cases where the sale did not meet DBS' standards.

Source: The Star

RHB Islamic Ties Up with 2 Takaful Operators

RHB Islamic has tied up with Takaful Ikhlas and MAA Takaful to distribute products of the two takaful operators.

Source: Business Times

ING Buys Menara Standard Chartered

ING is buying Menara Standard Chartered for RM328 mil. ING will continue to seek prime properties in Malaysia for investment.

Source: Business Times

BNM Met with Insurance and Takaful Leaders

BNM held a dialogue with leaders of the insurance and takaful industries today to discuss the developments in the economy and wide ranging issues facing the industries.

Among others, the insurers are ready for the implementation of RBC come 1 Jan 2009. The insurers and takaful operators will be more vigilant against fraudulent claims and potential fraud. BNM has also make available liquidity facility to insurance companies and takaful operators.

Source: BNM

Malaysian Re Counts on Overseas Markets

Malaysian Re is aiming to be the 5th largest reinsurer in Asia by next year. It currently occupies the 6th position.

Voluntary cession from local insurers currently forms 70.3% of Malaysian Re's total gross premium, the percentage is expected to decline further to 53.8%. Malaysian Re will have to look overseas to grow its business. Markets targeted include the Middle East, Japan, South Korea, India and China. However, due to limited capital, Malaysian Re will be selective in choosing which market to go to.

Malaysian Re has a rating of A- from AM Best and Fitch Ratings.

Source: Business Times

Zurich Enters Takaful

Zurich Financial Services Group has entered into a joint venture with Abu Dhabi National Takaful Company (ADNT) to establish a new family takaful business called Zurich Takaful Company Limited.

The new company will be based in Dubai International Financial Centre and will be 51% owned by Zurich and 49% owned by ADNT.

Source: Gulf News

3 More Parties Interested in Pacific Insurance

Pacific Insurance is certainly attracting a lot of potential buyers. In addition to Aureos Capital Limited (see our previous post), there are now 3 other parties that have expressed interest:

1. ACE Group of Companies including ACE Synergy Insurance Berhad
2. EON Bank Berhad
3. Usaha Tegas Sdn Bhd.

PacificMas has received BNM's approval to commence preliminary negotiations with the above parties concurrently.

Source: Bursa Malaysia