Global Recovery Income Plan (GRIP)

HLTMT launched GRIP yesterday. Product features:

• Australian-denominated syariah-compliant investment-linked takaful plan
• Capital protected
• 4-year term
• Min investment: A$10,000
• Sum covered: up to 125% of initial contribution
• Max sum covered per participant: A$600,000
• Offer period: 3/9/09 to 17/10/09
• Annual income distribution: 1st 3 years fixed, 4th year performance based
• Target contributions: A$30 mil

Source: The Star, Business Times

HLTMT's deal approved

Hong Leong Financial Group Bhd has received shareholders' nod to buy a controlling stake in HLTMT from Hong Leong Bank.

Earlier posts: 1 & 2

Source: Business Times

HLTMT's 2010 target

HLTMT sets the following targets for FY June 2010:

• Contribution of RM200 mil
• Bancassurance will contribute 70%
• Family takaful: RM5 mil

It is interesting to note that HLTMT achieved RM236 mil for FY 2008, higher than the target set for 2010.

HLTMT also formed a strategic alliance with TH Travel & Services Sdn Bhd to offer Badal Haji service to their family takaful contributors. Badal Haji is an act of performing the haj on behalf of the deceased, sickly, elderly or those who are disabled.

Source: Business Times, The Star

Rationalisation of insurance arms

The disposal of HLTMT as per our earlier post is part of the bigger picture of rationalisation of the equity holdings in insurance/takaful companies by Hong Leong Group. The ultimate aim is to park everything under HLAH.

In addition to the corporate exercise as per our earlier post, the following will also occur:

• HLA currently has an indirect wholly-owned subsidiary: Hong Leong Insurance (Asia) Limited, or previously known as Dao Heng Insurance Co., Ltd which undertakes general insurance business in Hong Kong. This will be moved to be directly under HLAH
• The 10% of HLTMT currently owned by HLA will also be moved to HLAH

The proposed rationalisation is expected to be completed by Q2 2009.

Source: Bursa

Hong Leong Bank to dispose of HLTMT

Hong Leong Bank (HLB) is selling its 55% stake in Hong Leong Tokio Marine Takaful (HLTMT) to HLA Holdings Sdn Bhd (HLAH) for RM53.67 mil. The original cost of investment is RM55 mil. The proposed transaction value is based on the net assets of HLTMT as per audited account at 30 June 2008.

Some background information on the structure of the group:

• Hong Leong Financial Group Berhad owns 64% of HLB, 100% of HLAH and 100% of Hong Leong Assurance Berhad (HLA)
• Current shareholders in HLTMT are: HLB (55%), HLA (10%) and Tokio Marine & Nichido Fire Insurance Co., Ltd (35%)

Source: Bursa

HLTMT i-Grad Scheme

Hong Leong Tokio Marine Takaful Bhd launched an education scheme named HLTMT i-Grad.

Product features:

• Maturity age: 19, 21, 23, 25
• Minimum contribution: RM70 per month
• RM100 per year at the beginning of each school year from age 8 to 18 years old
• RM100 for every 'A' in UPSR, PMR and SPM
• RM1,500 for CGPA >=3.5 for diploma graduates
• RM2,000 for CGPA >=3.5 for university graduates

Source: Business Times

Alpha Crescent Investment Plan

Hong Leong Tokio Marine Takaful (HLTMT) launched The Alpha Crescent Investment Plan.

Product features:

• 3-year shariah-compliant capital-protected investment-linked plan
• Potential investment returns at maturity is referenced against the Alpha Crescent Index
• Distributed by Hong Leong Bank
• Min contribution: RM10,000, max: RM2 mil
• Takaful coverage: 125% of investment amount

Source: The Star

HLTMT names new CEO

Hong Leong Tokio Marine Takaful has appointed Abdul Latiff Abu Bakar as its new CEO.

Source: Business Times

Takaful Annual Statistics 2007

The takaful industry saw a 3-fold increase in the agency force from 15,194 in 2006 to 43,843 in 2007. However, net contributions income only improved by 49%.

It is believed that the increase in the number of agents was caused by the new licensees such as Prudential BSN, HLTMT and MAA. Although the new licenses were granted in 2006, most of the new licensees only started business in 2007. Another new licensee HSBC Amanah Takaful does not have agency force but distributes mainly through HSBC bank.

It is interesting to note that the number of employees for the takaful industry only increased by 200-300 from year 2005, despite the entry of the 4 new players. This is because the new players mainly adopt shared resources model (sharing with their traditional insurance business) and this helped to improve efficiency as the management expense ratio for general takaful has decreased from 34.3% to 29.7%.

The per capita contributions on family and general takaful were still low at RM73.2 and RM20.8 respectively compared with the traditional counterparts of RM695 and RM369.

Is the Malaysia Takaful market growing too slowly? Our earlier article has highlighted the threat that MIFC may not achive its targets as GCC has already claimed to be the largest takaful market in the world.

By class of business, we saw investment-linked and motor takaful increase in share in new business in 2007. This may be a result of the new licensees' strategies. It is worth noting that the claims ratio for general takaful has deteriorated from 59.2% to 71.5%, mainly due to the poor performance of motor business.

Source: BNM

HLTMT Launched Gulf Opportunities Plan

Hong Leong Tokio Marine Takaful (HLTMT) launched a new 3-year capital protection investment-linked plan - HLTMT Gulf Opportunities Plan (GOP).

GOP's return is benchmarked against the performance of 3 assets classes: Middle Eastern Equities, Commodities and Foreign Currencies. The projected return is 10% p.a.

Minimum contribution for the plan is RM10,000, takaful coverage is 125% of initial contribution. Additional 0.1% units are allocated for contributions of RM50,000 and above.

The underlying structured product is provided by Citibank Islamic and GOP is distributed through Hong Leong Bank branches.

http://www.btimes.com.my/Current_News/BTIMES/Wednesday/Nation/tikoif.xml/Article/