News Digest 20100124-20100130

Insurance News Etiqa Takaful Bhd appoints Shahril Azuar Jimin as its new CEO. http://bit.ly/cxXiRn

Shahril Is New CEO Of Etiqa Takaful :: Bernama.com

Insurance News The government proposed in GTP for insurers to reduce insurance premiums for cars, motorcycles and houses installed with security features. But surely the motor tariff will have to go in the first place. Right? http://bit.ly/8XTcx5

Five initiatives shortlisted to check crime
The Home Ministry has shortlisted five initiatives to achieve the target of reducing the overall crime index by at least 5% by the end of this year, according to the GTP Roadmap.

Insurance News HSBC Amanah Takaful will launch 7 products this year, focusing on medical and retirement. http://bit.ly/cnBWIG Meanwhile, an insurance survey by HSBC shows that 49% of Malaysians plan to save more in the next 6 months. 58% of the survey respondents are likely to buy products that offer capital protection. http://bit.ly/9L05nT

HSBC Amanah Takaful to launch 7 products in 2010
HSBC Amanah Takaful (Malaysia) Sdn Bhd, the Islamic insurance arm of HSBC Bank Malaysia Bhd, plans to launch up to seven products this year. Chief executive officer Zainuddin Ishak said the company is now focused on traditional long-term plans such as retirement and medical health. ...

Insurance News Zurich Financial now says it wants to have controlling stake in its joint venture in Malaysia but would do it in such a way that all parties are comfortable. Zurich Financial currently holds 40% stake in the JV. http://bit.ly/cF3fXV

Zurich Financial eyes controlling stake in Malaysian venture
DAVOS: Swiss insurer Zurich Financial Services Ltd is exploring ways to take a controlling stake in its Malaysian joint venture and grow its business in Indonesia, its Asia-Pacific head said yesterday. ...

Insurance News Great Eastern denies that it is in talks to sell a stake in Malaysian unit. http://bit.ly/a9hgGR

Great Eastern not in talks to sell stake in Malaysian unit
GREAT Eastern Holdings Ltd (GEH) said it is not in talks to sell a stake in its Malaysian insurance arm, Great Eastern Life Assurance (Malaysia) Bhd (GELM). "We wish to state that we are currently not ...

Insurance News Allianz General is paying profit commission of RM6.26 mil to its qualifying agents (25% of its agency force) before Chinese New Year. http://bit.ly/81tH9B

Allianz pays commissions to agents early
Allianz General Insurance Co (M) Bhd (AGIC) kept its promise for the fourth consecutive year by making an early profit commission payment.In a statement today, AGIC's chief executive officer Ng Hang Ming ...

Insurance News Tokio Marine is targeting a lower growth rate of 10% in 2010 compared with the 20% it achieved in 2009. However, it still expects to outpace the industry's expected growth rate of 6-7%. Prefers non-motor lines of business e.g. fire, marine, cargo and PA. Not ruling out acquisition. http://bit.ly/81WhB0

Tokio Marine expects 10% premium growth this year
KUALA LUMPUR: Tokio Marine Insurans (Malaysia) Bhd (TMIM) expects a premium growth of between five to 10 per cent this year, its chief executive officer Dr Michael Heng Kiah Ngan, said Tuesday.

Insurance News Will Great Eastern divests it stake in Malaysia? How much is the divestment, if any? Is Khazanah the suitor or any other parties? Is divestment a pre-condition of being granted the takaful licence? Would IPO be an option if a direct shareholder cannot be found? This article may shed some light. http://bit.ly/8iwedl

Khazanah said among suitors for Great Eastern
A group of potential suitors, including state-owned investment agency Khazanah Nasional Bhd, is said to have lined up for a stake in Singapore's Great Eastern Life Assurance (Malaysia) Bhd to help realise the insurer's takaful ambition. ...

Insurance News Takaful Malaysia won the Global Diamond Award while its Group MD Hassan Kamil won the "Smart Entrepreneur" Award. http://bit.ly/6YbYwS

Takaful Malaysia, group MD win major awards

Insurance News While many may think that China and India markets are hot, Prudential is scaling back its growth ambitions in both countries. Instead investment would be pushed into fast-growing economies in southeast Asia, including Malaysia, Vietnam and Indonesia. The reason for such decision seems to be the slow relaxation of restrictions on foreign ownership of financial firms in China and India. http://bit.ly/7CJkyf

Prudential to Scale Back on India, China - NYTimes.com
LONDON (Reuters) - Britain's biggest insurer Prudential has begun a shake-up of its Asian business that will see it scale back its ambitions for growth in India and China, The Sunday Times said.

Insurance News LIAM, ACE Synergy and Prudential spoke on 2010 outlook and challenges. http://bit.ly/8H8IxQ

Malaysian insurers in for better times
PETALING JAYA: Despite facing some hurdles, the local insurance industry has a promising outlook with new life business weighted premium forecast to grow 12.5% to RM3.6bil this year.

Jerneh's Suitors

The 3 foreign parties interested in acquiring Jerneh are said to be:

• Generali
• HSBC
• Samsung Fire and Marine

Generali and Jerneh Asia have been partners in Asia since 1999. HSBC on the other hand partners Jerneh and EPF in HSBC Amanah Takaful.

Source: Business Times

Plus and minus points of HSBC Amanah Takaful

Fitch Ratings affirms HSBC Amanah Takaful's 'A-' Insurer Financial Strength rating with stable outlook, taking into account the following plus and minus points:

Plus

• Ability and willingness of HSBC group to provide support
• HSBC well-recognised brand name, product and distribution capabilities, management resources
• HSBC Amanah Takaful's healthy capitalisation, conservative investment mix, prudent management

Minus

• Limited track record
• Modest size
• Possible execution risks
• Competitive and evolving takaful environment
• Management of expenses in balance with growth
• Limited depth and breadth of Islamic bond market in Malaysia

Source: Business Times

HSBC enters China

HSBC has received regulatory approval to launch an insurance joint venture in China.

The joint venture structure:

• HSBC: 50%
• Beijing-based National Trust Ltd: 50%

The joint venture is named HSBC Life Insurance Co Ltd and will commence business in Q3 2009.

Source: Reuters

HSBC's Regular Contributions Doubled

HSBC Amanah Takaful targets to contribute 20% of HSBC Amanah Malaysia Berhad's revenue by 2011. Its current contribution is insignificant.

New regular contributions for the takaful operator had doubled to RM30 mil from RM15 mil recorded 6 months ago. The operator has also turned profitable recently.

Other statistics and facts:

• Sales of investment-linked products declined 32.6% in 2008
• Sales of savings and protection plans grew 19.1% in 2008
• May enter into bancatakaful partnerships with banks other than HSBC in future
  

Meanwhile a survey by HSBC Insurance showed that 2 of the most specific long-term wealth aspirations for Malaysians are in retirement and education funding.

At the bank side, HSBC Bank announced last week that it had started offering marine cargo insurance.

Source: The Star, Business Times 1 & 2

HSBC Amanah Takaful has new CEO

HSBC Amanah Takaful has appointed Zainudin Ishak as the new CEO. Zainudin was previously CEO for CIMB Aviva Takaful.

Source: Bernama

HSBC's New 3-Year Capital Protected Plan

HSBC Amanah Takaful launched another 3-year structured investment-linked plan on 2 Sept 2008. This type of product was first launched in March 2007 and generated RM92 mil contributions in 3-week period.

Some Features:

• Structured investment linked to the performance of a basket of 10 shares from China/Hong Kong, Taiwan and Korea
• Single contribution
• Capital protected
• Surplus sharing on maturity
• Minimum contribution RM20,000
• Offer period until 10 Oct 2008

Source: The Star & TAS Research

HSBC Amanah Takaful Appoints New CEO

Mohammed Muqeem is the new CEO of HSBC Amanah Takaful effective 2/6/2008. He joined HSBC group in 2004.

Muqeem started his career in the insurance industry in 1969 in India. He has worked in the Middle East in both Saudi Arabia and Dubai.

Source: The Edge Daily

LifeSelect Single

HSBC Amanah Takaful launched its new product LifeSelect Single yesterday. Product features:

• Investment-linked plan that covers 36 critical illnesses
• Single premium (?)
• Target sales: RM100 mil
• 2 funds available: Fixed income and Equity

Other corporate news:

• Target new business sales: RM350 mil (2008), compared with RM185 mil (2007)
• 4 new products in the pipeline

Source: The Star & The Edge Daily

ILP with CI from HSBC Amanah Takaful

HSBC Amanah Takaful is to launch an investment-linked product that covers 36 critical illnesses on 12 May 2008.

Source: The Edge Daily

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

HSBC Amanah Takaful CEO Leaving

According to a reliable source, HSBC Amanah Takaful CEO, Keith Driver, is leaving Malaysia. It is said that he is heading for India.

It is still unclear who will succeed Keith as the new CEO.

Keith came to Kuala Lumpur to start HSBC Amanah Takaful in early 2006, after a new takaful license was awarded to the joint consortium of HSBC Insurance, EPF and Jerneh.