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

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

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

AmLifestyle

AmAssurance launched a new investment-linked product called AmLifestyle.

Some of the product features:

• Funds managed by AmInvestment Management Sdn Bhd
• Annual premium from RM1,800
• 1st 2 switches in a policy year are free
• Subsequent switches are subject to a maximum charge of RM50 per switch
• Minimum amount to switch: RM500 or entire fund
• 3 AmLifestyle packages available

Some of AmAssurance's business targets:

• RM77 mil first year premium collected
• 20% business growth

Source: Bernama

MAA may be Taken Private

MAA Holdings may be taken private by the Melawar group, as the stock is "grossly undervalued".

Tunku Ya'acob said he would "definitely consider doing a voluntary general offer for MAA Holdings if he could raise money".

On the sale of MAA's general insurance business to AmG Insurance Bhd, the price has been agreed upon and the deal would be concluded in 3 months.

MAA has presence in:

• Indonesia: PT MAA Life Assurance, PT MAA General Assurance
• Philippines: MAA General Assurance Philippines, Inc. and MAA Mutualife Philippines, Inc.

Source: Business Times

MAA Expects to be Back in the Black

MAA expects to write back RM49 mil and recover 40% of its NPLs by end of the year. Todate the group has recovered 15% of its NPLs.

The writeback of RM49 mil is thru handing over an interest rate swap transaction to a bank. FRS 139 accounting standards have negative impact on such swap arrangement.

MAA plans to launch 6 more products this year.

MAA is still in discussion with AmAssurance on strategic partnership for its general insurance and takaful business.

Source: Business Times

AmBeautiful & AmBeauty

AmAssurance launched 2 new products on the Saturday of the long weekend.

AmBeautiful is an insurance policy which rewards the policyholder in good and bad times throughout different life stages. There are 4 plans to choose from, and the product will be available through AmAssurance's 4,000-strong agency force. Expected sales volume: RM7.7 mil.

AmBeauty is an insurance product that focuses on effectively protecting women who are carrying out their daily routine tasks. There are 8 plans available and these will be sold through the DM/TM channel. Expected sales volume: RM1.5 mil.

Source: Bernama

AmAsia Star

A closed-end 3-year capital guaranteed investment-linked fund was launched by the AmBank Group lately. Some details of the product are:

• 100% capital guarantee at maturity


• Exposure in 4 different Asian indices:
• Asia Financials Index Performance minus Cash DAXGFSRU Index
• Morgan Stanley Asia Property minus Cash MORAPRI LX Equity
• S&P GSCI Industrial Metals Excess Return SPGCIN Index
• S&P GSCI Precious Metals Excess Return SPGCPMP Index
• Performance based on best 3 out of 4 of the baskets above
• Minimum investment: RM5,000
• Maximum investment: RM1,500,000
• Offer period: 45 days
• Insurance = 125% of Single Premium (aged 1 - 60)
• Insurance = 105% of Single Premium (aged 61 - 70)
• Target fund size: RM200 mil
• Target return: 8% p.a.
• Previous launch: AmAsia Link, Sept 2007, fund size: RM100 mil

Ohter products in the pipe line:

• AmPreferred Medicare (June 2008)
• An investment-linked education product (June 2008)
• Critical illness product (July 2008)
• 3rd series of AmAsia funds (November 2008)

Source: The Star & AmAssurance

IAG - A Takeover Target

Insurance Australia Group (IAG) has become a takeover target of QBE Insurance Group Ltd. However, until the time this blog was posted, the offer made by QBE was rejected by the Board of IAG on the reason that the offer made was inadequate and not attractive.

IAG owns 30% of AmAssurance in Malaysia.

Source: Bloomberg

AmAssurance Starts Due Diligence

AmAssurance has started due diligence on acquiring MAA's general insurance business. The due D will take 10 days.

AmAssurance also expects to receive MoF's approval on splitting their life and general insurance license by next week.

Meanwhile, AmAssurance launched 3 non-motor insurance products: AmHospitality, AmEdu Package and AmSMI - F&B. This is to better balance its portfolio (RM550 mil gross premiums) which currently consists of 70% motor business.

http://biz.thestar.com.my/news/story.asp?file=/2008/3/26/business/20746053&sec=business

IAG Plans to Dispose Stake in AmAssurance Life

IAG plans to dispose of its 30% stake in AmAssurance life business, the potential buyer is Friends Provident, although the latter is itself a potential takeover target of US private equity firm JC Flowers & Co.

It was reported that IAG would focus on general insurance business by increasing its stake in AmG Insurance from the current 30% to 49%. IAG bought the 30% stake in 2006 for RM193.2 mil.

http://www.btimes.com.my/Monday/OurPick/am24.xml/Article

AmAssurance Offered 10% of MAA Takaful

MAA Holdings Bhd (MAAH) has sweetened the deal to sell its general insurance business to AmAssurance by offering the latter 10% equity in MAA Takaful (MAAT). The deal is expected to go through in 2H 2008.

Currently MAAT is owned by MAAH (75%) and Solidarity (25%).

http://www.btimes.com.my/Current_News/BTIMES/Monday/Nation/maa2f.xml/Article/index_html

MAA Sells Life & General Units Separately

Business Times reported that MAA is to sell its general insurance business to AMAssurance and life insurance business to either Axa or Allianz.

AmAssurance is also interested in MAA's takaful business, as reported in this blog earlier.

The splitting of business will attract better price for MAA. Given that AMAssurance is also in the process of splitting its composite license, MAA does not expect any objection from BNM on its proposal to split the business and sell them separately. MAA has yet to seek BNM's approval on splitting and the process is expected to take 6 to 9 months.

http://www.btimes.com.my/Current_News/BTIMES/Monday/Latest/maa1.xml/Article/

AmAsssurance Interested in MAA Takaful

AmAssurance announced that in addition to talking to MAA in acquiring their general insurance business, they are also in talk with them to acquire their takaful business.

http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/LsvAllByID/48256E5D00102DF448257410003B5A3F?OpenDocument

http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_c50b0167-cb73c03a-b9b61800-2b3bb39e