News Digest 20091116-20100106

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No change in voluntary cessions

Malaysian Reinsurance Berhad has received confirmation from BNM that the Voluntary Cessions (VC) levels in 2010 would remain the same as 2009. Specifically:

1. VC on Motor, PA, H&S: 4% quota share, no cession limit
2. VC on other classes: 5% quota share, no cession limit
3. Auto-Facultative and Auto-Treaty: 15% VC. Retrocessions: 20% VC

For years 2011 and 2012:

1. 4% revised to 2.5%
2. 5% remains
3. 15% and 20% remain

Source: Bursa

News Digest 20091105-20091116

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8.5% growth for MNRB Group

MNRB is projecting 8.5% growth in revenue for FY 3/2010 comapred with 20% achieved in FY 3/2009:

• Malaysian Re: 15-20% growth compared to 20% growth in FY 3/2009
• Takaful Ikhlas: RM600 mil gross contributions for FY 3/2010 (RM580.5 mil FY 3/2009)
• MNRB Retakaful: 30% growth for overseas business

Source: Business Times, The Star

MNRB sets RM30 mil provision

MNRB is likely to set aside RM30 mil in provision to cover equity investment losses in FYE 31/3/2009.

Other business facts:

• 10% assets invested in equities, 24% in MGS, 50% in cash, balance in PDS
• FY 2008 net profit: RM165.6 mil
• 1st 9 months in FY 2009, net loss: RM21.4 mil
• Malaysian Re rated A- by A.M. Best and Fitch Ratings

Source: Business Times

MNRB posts poor Q2 results

MNRB has reported a net loss of RM13.3 mil in Q2 or RM7.55 mil loss in H1 on higher revenue. Reasons of the poor performance are:

• Higher reinsurance claims due to disasters: heavy snowstorm and earthquake in China, floods in Jakarta, cyclone in Myanmar and storms in Europe
• Additional provision for diminution of investments in quoted securities

MNRB also dismissed rumours that its wholly-owned Takaful Ikhlas has attracted bids from three companies, as reported by the Malaysian Reserve.

Meanwhile, Takaful Ikhlas continues to deliver strong results with a net profit of RM6.35 mil, up from RM2.67 mil.

Source: The Star, Business Times

Malaysian Re Counts on Overseas Markets

Malaysian Re is aiming to be the 5th largest reinsurer in Asia by next year. It currently occupies the 6th position.

Voluntary cession from local insurers currently forms 70.3% of Malaysian Re's total gross premium, the percentage is expected to decline further to 53.8%. Malaysian Re will have to look overseas to grow its business. Markets targeted include the Middle East, Japan, South Korea, India and China. However, due to limited capital, Malaysian Re will be selective in choosing which market to go to.

Malaysian Re has a rating of A- from AM Best and Fitch Ratings.

Source: Business Times

MNRB's Regional Plan

MNRB's main focus in the next few years will be overseas especially in takaful and reinsurance businesses:

• Takaful Ikhlas is eyeing the Egyptian (population: 70 mil, penetration rate: 1%) and Indonesian takaful markets
• Takaful venture in Egypt will be with selected partners
• Not ruling out strategic partner for Takaful Ikhlas in Malaysia
• Indonesia has no proper legislation on Islamic Insurance, potential will be tremendous once legislation framework is in place
• Reinsurance business made some inroads to Japan, the Middle East, North Africa and Eastern European countries
• Retakaful will focus in Malaysia, the world's largest takaful player

Source: The Star

Retakaful Potential in Indonesia

MNRB Retakaful will concentrate on Indonesia and Britain as growth at home grinds to a halt.

Indonesia's general retakaful market is expected to grow at double-digit rates or more in the next 2 to 3 years. The Indonesian authorities are expected to impose a ruling requiring retakaful cover (instead of conventional reinsurance) for takaful business.

Source: Business Times

MNRB Retakaful to Increase International Business

International business is expected to contribute 20% of MNRB Retakaful's total revenue in FYE 31 March 2009 compared to the current 10% level.

The company is looking to expand to Kuwait, Saudi Arabia and the UAE by year-end, and also planning to enter the European market. Currently the company has business dealings in Indonesia, Brunei and Sri Lanka.

Fitch Ratings recently gave BBB+ rating to MNRB Retakaful.

Source: The Star

BBB+ for MNRB Retakaful

Fitch assigns 'BBB+' Insurer Financial Strength (IFS) rating to MNRB Retakaful with stable outlook.

Factors considered for the rating were:

• MNRB Holdings Berhad's ability and willingness to provide support in times of need
• Catastrophe-free Malaysian market - the main focus of MNRB Retakaful's business
• Healthy capitalisation, prudent management
• Limited track record
• Modest size
• Possible execution risks

Source: Fitch

UK's First Takaful Operator

Principle Insurance has become the 1st takaful operator in United Kingdom. It received the authorisation by the Financial Services Authority (FSA) recently.

Principle Insurance will provide motor and home general takaful later this year. The motor takaful will be available over the phone. Principle will adopt the wakalah model. UK has a Muslim population of 2 mil.

Principle Insurance was previously known as British Islamic Insurance Holdings (BIIH). Previously, we reported that MNRB is interested in 9.99% share of BIIH. Click here for our earlier report.

Source: Asian News

MNRB Retakaful to Breakeven in 3rd Year

MNRB Retakaful targets to breakeven in its 3rd year of operations. The company started operations in August 2007.

Gross contributions for 1st financial year should come in at RM20 mil.

Going forward, overseas business is expected to contribute 70% of revenue. Countries targeted by MNRB are Kuwait, Saudi Arabia, Indonesia, Brunei, Sri Lanka and Pakistan.

MNRB will focus mainly on general retakaful business.

Source: Business Times

MNRB to set up Actuarial Consulting Firm?

Apparently MNRB is thinking of setting up its own actuarial consulting firm in future.

In the past, MNRB has been giving out actuarial scholarships. It is keen on producing more qualified actuaries in Malaysia and eventually consider setting up a company specialising in actuarial science. The company will be 49% owned by MNRB and the rest owned by the qualified actuaries in the company.

Is this a dream likely to be realised and how soon? What do you think?

Source: Business Times

MNRB to buy British Islamic Insurance

MNRB is entering the UK's takaful market through proposed 9.99% purchase of British Islamic Insurance Holdings Limited (BIIH).

BIIH has 2 wholly-owned subsidiaries: BIIH General Limited (general insurance business) and BIIS Limited (insurance intermediation services).

BIIH intends to offer general takaful products and would be the 1st independent wholly Shariah compliant entity offering takaful products in the UK.

The transaction is expected to complete by 30 June 2008.

Source: Bursa Malaysia

MNRB's New Group CEO

Anuar Mohd Hassan (pictured) has been appointed new President and Group CEO of MNRB. He was previously President & CEO of Malaysian Reinsurance Bhd, a subsidiary of MNRB.

Meanwhile, Hashim Harun, formerly CEO of Uni.Asia General Insurance Bhd, has taken over as the President & CEO of Malaysian Reinsurance Bhd.

Both appointments take effect on 1 April 2008.

http://www.btimes.com.my/Current_News/BTIMES/Tuesday/BizBriefs/mnrb31.xml/Article/