News Digest 20100110-20100116

Insurance News It is TM Asia's turn to say that they want to double their premiums, but this time it seems to be a target set for only Sabah or the most for East Malaysia. The company also wants to be 1 of the top 5 in 2 to 3 years' time mainly through its agency force. http://bit.ly/6BDdfE

TM Asia Life aims to double premium
TM Asia Life Malaysia Bhd, which has embarked on an expansion plan in East Malaysia, hopes to double new business premium with the opening of its new premises in Kota Kinabalu. The company, with a strong ...

Insurance News Vincent Kwo is now COO for MAA. http://bit.ly/8O41Hb

MAA appoints chief operating officer
MALAYSIAN Assurance Alliance Bhd (MAA) has appointed Vincent Kwo Shih Kang as chief operating officer from January 2. Kwo, 49, graduated from City University, London, in 1982 where he obtained a Degree ...

Insurance News AXA Affin does not rule out acquisition to achieve its 8% market share target. Our view is that this may in fact be a more feasible route given that doubling the premiums every year is not an easy task at all. Perhaps AXA should explore with UOB and see whether the latter has intention to sell its insurance units in Malaysia? http://bit.ly/6dFGcH

AXA Affin not ruling out acquisitions, partnerships
AXA Affin Life Insurance Bhd hopes to grow its share of the local life insurance market from 1.5 per cent to 8 per cent by 2012, as it undertakes a AXA global branding exercise.Its chief executive officer ...

Insurance News It is unusual to have an Islamic bank that doesn't have any takaful operations to comment on takaful. OCBC Al-Amin commented that the growth of takaful lagged behind Islamic banking. Great Eastern, which is owned by OCBC, is believed to have applied for 1 of the 2 new takaful licences to be issued this year. GE has also recruited the ex-CEO of Prudential BSN to enhance its chance of getting the new licence. http://bit.ly/6hKEVH

Malaysian takaful growth lags banks
Growth in Malaysia’s takaful Islamic insurance industry has lagged the sharia banking sector as insurers struggle to find a home for premiums and players lack distribution channels, Singapore’s ...

Insurance News AXA Afiin Life needs to double premiums to be top 5 player by year 2012. http://www.actuaries.com.my/news/2010/01/axa-affin-life-needs-to-double-premiums.html

Insurance News: AXA Affin Life needs to double premiums
www.actuaries.com.my
Axa Affin Life has a huge target to achieve by year 2012. It has to grow its market share from the current 1.5% to 8%, to be among the top 5 in the industry. Its NB premium was RM162 mil in 2009, the target set for 2010 is RM320 mil and RM100 mil for total premiums and weighted premiums respectively...

Insurance News Dedicated to all our readers who are insurance agents. http://www.youtube.com/watch?v=ysA-wtl8-YI&feature=autofb

Insurance agent - Bangkok Life advertisement
Bangkok Life Assurance advertisement

Insurance News CIMB Aviva Takaful launched EasyLife Takaful Series and expects to secure contributions of RM35-40 mil. The takaful player aims to increase its market share from the current 2-3% to 5% in 2 years time. There are currently 8 takaful players in the market with 2 new licences to be issued soon. http://bit.ly/6nmFtQ http://bit.ly/6p0TRW http://bit.ly/5Q3TlO

CIMB Aviva aims for 5pc market share
CIMB Aviva Takaful Bhd is looking to increase its market share to five per cent in two years in line with the steady growth of the takaful industry, chief executive officer Muhammad Fikri Mohamad Rawi ...

Insurance News CIMB Wealth Advisors which started distribution for AIA since March 2009 secured RM7.6 mil premium in 2009. It sets a target of RM25 mil for 2010 planning to tie up with more insurers after obtaining its financial advisor licence. http://bit.ly/6ceiyR

CIMB Wealth sees RM25m premiums
CIMB Wealth Advisors Bhd aims to secure RM25 million premium this year from insurance and takaful products, chief executive officer Tan Beng Wah said today.The company managed to secure RM7.6 million premium ...

BSC intends to increase stake in MAA Takaful

Bahrain's Solidarity Company (BSC), a 40% unit of Ithmaar Bank, has intention to increase its stake in MAA Takaful. However, the deal has to be a win-win situation for both BSC and MAA Holdings.

Source: The Star

MAA Takaful will not be sold to AHB

AmG Insurance Berhad will proceed to acquire general insurance business of MAA, the price will however be revised to RM180 mil from RM254.8 mil (subject to further adjustments).

The revision of price is in view of 4.9% equity stake in MAA Takaful Berhad will not now be sold to AMMB Holdings (AHB). The equity holding in MAA Takaful is considered to carry some strategic value.

Source: Bursa 1 & 2

MIFC begins roadshows in Qatar and Bahrain

MIFC started a 6-day roadshows on Saturday in Qatar and Bahrain to promote Malaysia as the international hub for Islamic finance.

More than 80 Malaysian delegates including those from MAA Takaful Bhd take part in the roadshows.

Source: Bernama

Uni.Asia General new CEO

Uni.Asia General is tipped to have a new CEO, and the candidate is tipped to be David Tan from MAA. David is currently the EVP for General Corporate Client and Schemes for MAA.

Information on Uni.Asia General:

• Gross Premiums: RM410.4 mil (FY09) vs RM349.5 mil (FY08), growth: 17.4%
• Market share: 3.7%
• Rank: 10th
• Pre-tax loss: RM5.8 mil (FY09), pre-tax profit: RM24.1 mil (FY08)

Earlier posts: Uni.Asia General CEO resigns, New COO for Uni.Asia General

Source: The Star

SC approved disposal of GI business

MAAH has obtained Securities Commission's approval to dispose its general insurance business to AmG Insurance Bhd for an indicative consideration of up to RM254.83 mil. The approval is subject to green lights from BNM and MAAH shareholders.

Source: The Edge

MAA's deal expected to conclude in Q4

The sale of MAA's GI unit and 4.9% of MAA Takaful to AMG Insurance Berhad is expected to conclude in Q4 2009.

Transaction prices:

• MAA GI: RM274.8 mil
• 4.9% of MAA Takaful: RM16.2 mil

MAA is also considering raising capital either through rights issue or issuing new notes.

Source: Business Times

Syariah adviser on MAA Takaful's board

MAA Takaful has a syariah adviser on its board and thinks that this will give it competitive advantage.

Facts on MAA Takaful:

• 15,000 agents, only 30% are active
• Focuses on investment-linked business
• 13% market share in investment-linked
• 10% market share in single contribution business
• Targets 35% growth in regular investment-linked new business

Source: The Star

MAA lowers price of GI unit

MAA has revised the selling price of its general insurance unit from RM274.8 mil to RM254.83 mil. The deal is subject to BNM's approval.

Source: Business Times

Earlier post

MAA not under receivership

MAA has denied the rumour that the group has been placed under receivership over unpaid debts.

MAA said that its only loan of RM200 mil bond has been serviced promptly to date. It also denied that it was selling its life insurance division.

Other business statistics:

• FY2008, net loss of RM70 mil, revenue RM2.21 bil
• Recoveries from NPL: RM251.58 mil FY2008
• NPL at 31/12/2008: RM450.48 mil, at 31/12/2007: RM649.92 mil

Source: Business Times

Super Fortune

MAA has launched an endowment plan, Super Fortune Plan, and targets RM100 mil premium within a year.

Product features:

• Entry age: 10 to 55 years
• Guaranteed annual cash payments (GACP) from end of 10th policy year
• At maturity, 120% of SA is payable
• TPD up to age 60 and Death benefits are provided
• Premium payments can be completed in 6, 10, 15 or 20 years
• Maturity age: 50 for entry age 10 - 20, 4% GACP from end of 10th year
• Maturity age: 60 for entry age 21 - 30, 4% GACP (10th - 19th yrs), 6% GACP (>=20 yrs)
• Maturity age: 70 for entry age 31 - 40, 4% GACP (10th - 19th yrs), 6% GACP (>=20 yrs)
• Maturity age: 80 for entry age 41 - 55, 4% GACP (10th - 19th yrs), 6% GACP (>=20 yrs)
• SA starts from RM25,000
• Riders are allowed
• Sample premium: Male, non-smoker, 35, SA RM100,000, AP=RM15,540 for 6 yrs
• For more sample premium rates, please contact us

Other business targets/strategies:

• RM1 bil life insurance premium sales
• Moving away from single premium business

M&A update:

• Deal with AmBank group to be completed in 4 to 6 weeks
• General insurance unit sold for RM274.8 mil
• 4.9% of takaful unit sold for RM16.2 mil

Source: The Star, Business Times, The Edge, TAS Research

Teras Malaysia Extra

NIAM launched Teras Malaysia Extra on 9 February 2009, targeting RM20 mil premiums this year. The earlier version, Teras Malaysia was launched in 1998, generated RM222 mil premiums from 236,000 policyholders.

The product is sold by AMLife, Etiqa, HLA, MAA and MCIS Zurich.

Product Features:

• Term with 100% refund of premiums
• Death: 100% SA
• TPD: 100% SA (up to age 54), max limit: RM1 mil, payment: 20%/80%
• Accidental death: 200% SA (up to age 65)
• CI: RM10,000, covering 36 CIs
• Daily hospital allowance: RM50/day, up to 45 days per year, lifetime limit: 300 days
• Funeral expenses: RM2,000
• 4 different terms: 15, 20, 25 and 30 years; premium payment term = policy term
• SA: min: RM50,000, max: subject to u/w
• Payment mode: Annual, Semi, Quarterly and Monthly
• Min entry age: 16 next birthday
• Max maturity age: 70
• Sample premium: Male age 30, term 30, SA: RM100,000, annual premium: RM1,896

Source: The Star, TAS Research

MAA ties up with IEM

MAA has tied up with the Institution of Engineers Malaysia to enable its members to buy MAA's products at atrractive prices. MAA is also setting up 3 accident centres to enhance its services for its motor insurance policyholders.

Source: The Star, Business Times

Bonus units and dividends for MAA Takaful funds

MAA Takaful declares the following for its investment-linked funds:

• Shariah Growth Fund: 8 bonus units for each 100 units held
• Shariah Balanced Fund: 10 bonus units for each 100 units held
• Shariah Income Fund: 1.3% dividend

Source: Bernama

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

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

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

MAA Takaful Teams Up with Celcom

MAA Takaful Bhd has teamed up with Celcom to sell PA Takaful Scheme to mobile subscribers of the latter. This follows similar scheme offered by AIG to Digi's subscribers.

In our Post dated 12 September 2008, we raised the question whether Maxis and Celcom would follow suit. Celcom has responded, will Maxis be next?

Scheme features:

Celcom Blue Prepaid

• Free RM20,000 PA for 1st year
• RM12 contributions per year from 2nd year onwards

Postpaid Customers

• RM40,000 PA

Xpax Customers

• RM1 contribution per month from day 1

MAA Takaful targets RM2-3 mil contribution from this product in the 1st year of launch. Celcom has 8 mil subscribers, 3 mil more than Digi.

Source: The Star, Business Times

Middle East Investor Involved in MAA's Privatisation

There is new speculation that MAA will be taken private using fund from a Middle East investor. The fund will also be used for fresh capital injection to improve solvency ratio.

MAA has been in discussions with various parties in the past on M&A. The parties included Allianz, Axa, Kurnia and Nippon Life.

Source: Business Times

Boards Can't Confirm on Privatisation

The Boards of Melawar Group and MAA Holdings Bhd are not able to confirm Tunku Ya'acob's remark that MAA may be taken private.
"The Boards are only able to comment after they have made due enquiries with the major shareholder, who is currently overseas."

Source: The Star

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 Takaful's Funds to be Managed by CIMB

CIMB-Principal Asset Management Bhd has been hired by MAA Takaful Bhd to manage the latter's following investment-linked funds:

• Syariah Growth Fund
• Syariah Balanced Fund
• Syariah Income Fund

Source: Business Times

News in Brief for the Week

1. Great Eastern and OCBC launched the OCBC Great Eastern Centennial Limited Edition credit card to commemorate Great Eastern's 100th Anniversary.

   Source: The Edge Daily

2. MAA Holdings chairman Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman passed away at the age of 83.

   Source: The Star

3. Takaful Malaysia aims to capture 1/3 market share of the government housing loan scheme. Up to June 30, 2008, Takaful Malaysia has captured 20% market share. The company opened its new Treasury Business Centre in Putrajaya. A takaful desk will also be set up at Bank Islam's branches nationwide. 4 new products under wakalah concept will be launched within 2 months.

   Source: Bernama

News in Brief

MAA Takaful recently visited Solidarity Group in Bahrain. The delegation was led by CEO and comprised leading agency managers and sales agents.

Source: Gulf Daily News

MAA Takaful CancerCare

MAA recently launched a standalone comprehensive cancer plan that covers all forms of cancer.

Product Features:

• For 10 gender-specific cancers, benefits are paid at the 1st stage of cancer
• Entry ages: birth to age 65
• Expiry age: 75
• Coverage: RM25,000 to RM500,000
• Contribution starts from RM67 p.a.
• Extra 25% benefits on male cancers: lung, prostate, colon, small intestine, nasopharyngeal and female cancers: cervical, uterine, ovarian, breast, vagina
• Advanced payment of 25% benefits at the stage of Carcinoma in Situ
• Funeral expenses: RM10,000
• Surplus sharing: 50%

Other information:

• Target contribution for this product in 1st year: RM10 mil
• Secured 138 certificates since launch in early July
• Products in the pipeline: capital-protected endowment, medical plans, specialised PA

Source: The Star

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

One Less Suitor, One More Suitor

One Less Suitor

Allianz Insurance Management Asia Pacific Pte. Ltd has pulled out from the negotiations to acquire equity interest in MAA. It is believed that AmAssurance is left in the discussions at the moment.

MAA shares closed 10 sen or 8.5% down before the announcement.

One More Suitor

Fairfax Asia Limited has expressed interest to acquire an equity stake in Tahan. Currently there are 3 interested parties (including Fairfax) in negotiations to acquire Tahan.

Fairfax is a Canadian company and owns 1 of the largest general insurance companies in India.

Source: Bursa Malaysia 1 & 2

Axa Affin Calls off MAA's Acquisition

LATEST

Axa Affin has called off its talk to acquire MAA. MAA share closed 1 sen down at RM1.29 with low trading volume.

Source: Bursa Malaysia

PA Policies in 10 Minutes

MAA has invested RM3 mil in Electronic Personal Lines System (ePEL), an online web-based policy issuance system. ePEL will allow agents to issue non-motor policies in 10 minutes.

Currently ePEL can handle 4 types of personal accident policies. The plan is to expand to houseowner and householder fire classses in September and miscellaneous classes by year-end.

Source: The Star

MAA Adjusts FYE 2007 Results

MAA Holdings Berhad adjusted the earlier released unaudited FYE 2007 results from a consolidated net loss of RM55.39 mil to RM73.27 mil.

The main items of adjustment are:

• An additional allowance for diminution in value of unquoted corporate debt security of RM13.87 mil
• Additional share of loss from associated company of RM8.06 mil

As at the point of writing, MAA share dropped 2 sen in light trading this morning.

Source: Bursa Malaysia

MAA to Launch New CG Fund

MAA will launch a new capital guaranteed fund next month, presumably Series 5 of its Maaster Capital Guaranteed Plan (MCGP5).

The target premium is RM50 mil, a modest target for this type of plan, but in line with the RM165 mil achieved in the 4 earlier series.

Some features:

• 90% invested in bonds and 10% in equities
• Minimum premium: RM10,000
• 100% capital guarantee at maturity

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

AXA Affin's Corporate Activities

AXA Affin General Insurance Bhd is currently involved in 2 potential M&A deals: merger with Boustead Holdings Bhd's BH Insurance (M) Bhd and acquisition of MAA.

Other business information:

• Total gross premium RM312 mil (2007), growth of 4.1% (industry average 4.07%)
• 1,500 agents nationwide, incl. 273 in East Malaysia
• Targets to add 15% more agents in West Malaysia in 2008
• Business mix: motor insurance (45%), commercial insurance (30%), health & marine
• Profit margin 16%, top 5 most profitable
• Market share 2.7%, ranked 18 out of 35

Source: The Star

MAA's Global Natural Resources Feeder Fund

MAA International Assurance Ltd will launch a new feeder fund on 28/4/2008 - Global Natural Resources Fund.

The fund will invest in equities of global companies involved in the extraction, processing, transportation and distribution of natural resources.

Minimum initial investment is S$2,500, minimum top-up is S$1,000, 1% free group life insurance is given on the total investment.

Expected annual return is 20%, expected sales is S$30 mil over 12 months.

Source: The Star

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

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