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