News Digest 20100309-20100320

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News Digest 20100301-20100309

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News Digest 20100223-20100301

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News Digest 20100203-20100223

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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.

News Digest 20100117-20100123

Insurance News TokioMarine has promoted Deputy CEO Dr Michael Heng as CEO, replacing PhangKwang Chee who has helmed the top post for the past 9 years. TokioMarine's market share grew from 48th position in 1999 to 5th position last year. http://bit.ly/7AXC0g

Tokio Marine names new CEO
Tokio Marine Insurans (Malaysia) Bhd today announced the appointment of Dr Michael Heng Kiah Ngan as its new chief executive officer.Heng, who was previously the company's deputy chief executive officer, ...

Insurance News Etiqa launches Triple Lifestyle Protector. Features: 15% SA paid every 3 years from 5th policy year; 100% SA returned at maturity; premium payment period of 20 years or until age 85. http://bit.ly/7vkOOd http://bit.ly/8KXxzy

BERNAMA - Etiqa Insurance Jangka Pelan Terbaharu Dapat Sambutan Baik
KUALA LUMPUR, 20 Jan (Bernama) -- Etiqa Insurance Bhd menjangka pelan Triple Lifestyle Protector yang dilancarkan baru-baru ini di mana ia menawarkan pelbagai faedah di bawah satu polisi mendapat sambutan yang baik. ...

Insurance News Prudential is targeting the largely untapped and underserved bumiputera market, focusing on young generation especially those below age 25. Great Eastern has also previously unveiled strategies that include targeting young generation. http://bit.ly/6nHL5D http://www.actuaries.com.my/news/2010/01/strategies-of-prudential-and-great.html

Prudential to tap into growing Bumi market
LEADING life insurer Prudential Assurance Malaysia Bhd wants to tap into the growing Bumiputera market by increasing its Bumiputera agents, said its top executive. Chief executive officer Charlie Oropeza ...

Insurance News Prudential launches an aggressive branding campaign covering 9 markets in the region in 7 languages on "The Power of Listening". http://bit.ly/5XgKaj

The power of listening
PRUDENTIAL Corporation Asia recently launched “The Power of Listening”, its largest branding campaign in its 85-year history in Asia.The campaign reinforces the company’s “Always Listening. Always Understanding” ...

Insurance News Tune Money aims to double insurance policies sold to 3,000-4,000 this year. Currently it partners Multi-Purpose for motor insurance and Tokio Marine for PA and home insurance. Takaful is in the pipeline as well as H&S, life, travel and pets. http://bit.ly/8Ne1wd http://bit.ly/5kaKoB

Tune Money aims for RM4m net profit this year
ONLINE financial services provider Tune Money Sdn Bhd, which has been profitable since last April, aims for a net profit of up to RM4 million this year as it grows its prepaid card and insurance base. ...

Insurance News Zurich Financial has come out to clarify that the partners in MCIS Zurich are still keen to work together although admitting some of the facts reported earlier on the tension in the relationship were not wrong. Zurich Financial is also not selling its stake in MCIS Zurich. http://www.actuaries.com.my/news/2009/12/no-strained-ties-between-shareholders.html http://bit.ly/7Guc11

MCIS Zurich owners deny rift, remain keen on takaful ops
MCIS Zurich Insurance Bhd's major shareholders have denied that there is any rift between them and say they remain keen to build the business together. They also denied that Switzerland's largest insurer, Zurich Financial Services Ltd (Zurich FS), might sell its shares in MCIS Zurich. ...

Insurance News Allianz General launched a Directors' and Officers' liabilities insurance product. http://bit.ly/54HdEh

Allianz debuts product for corporate leaders
Allianz General Insurance Company (Malaysia) Bhd (AGIC) today launched a new generation of insurance protection, specially tailored for leaders of Malaysian corporations."Allianz Protect Platinum goes ...

Insurance News MFPC launches Syariah RFP programme, appoints MPM as examination facilitator. http://bit.ly/6MHuhm

Insurance News Takaful Ikhlas is the winner of best brand in the services -Islamic protection and the healthcare insurance categories. http://bit.ly/7TIDUk

Takaful wins Brand Laureate awards
TAKAFUL Ikhlas Sdn Bhd has won two awards at the BrandLaureate SMEs Chapter Awards 2009 for brands in corporate branding. It was named the best brand in the services -Islamic protection and the healthcare insurance categories. ...

News Digest 20100106-20100113

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Prudential buys UOB Life

Prudential will pay S$428 mil to buy UOB Life. As part of the deal, United Overseas Bank (UOB) will also sell Prudential's life, accident and health insurance policies for 12 years at the bank's branches in Singapore, Indonesia and Thailand.

What will happen to Uni.Asia, which UOB also has a stake in?

Source: The Edge Singapore

News Digest 20091116-20100106

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Tender called to sell Tahan

Tahan Insurance will be sold through a tender to be called in January 2010. The company is currently under control of BNM due to failure to comply with minimum CAR of 130% under RBC.

Under BNM's control, Tahan implemented a turnaround plan that focuses on a few key areas including:

• tightening management and accountability
• strengthening organisation's people and agents
• reducing exposure to loss making motor business
• managing claims and management expenses, including settling claims promptly
• recovering old debts from agents, reinsurers and insurers
• tightening underwriting terms

Source: Business Times 1 & 2

No strained ties between shareholders in MCIS Zurich

MCIS Zurich denies that there is strained ties between the 2 major shareholders: Koperasi MCIS Bhd, which owns 43.69%, and Zurich Asia Holdings Ltd, which owns 40% of MCIS Zurich.

Zurich Asia Holdings Ltd is also not selling its stake in MCIS Zurich, according to CEO of MCIS Zurich.

Earlier, Business Times reported the alleged strained relationship due to the following:

• Zurich FS' proposal of selling 30% of MCIS Zurich to EON was blocked by Koperasi as Koperasi will lose its control on MCIS Zurich. The EON deal would improve MCIS Zurich's market share as EON Bank is currently giving its bancassurance business to Uni.Asia
• Zurich FS did not support Koperasi's proposal to apply for the new takaful licence unless Koperasi was willing to lose its control on MCIS Zurich
  

Source: The Star 1 & 2, Business Times 1 & 2

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

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

Jerneh in M&A Negotiations

Unnamed foreign insurance companies have expressed interest in acquiring Jerneh. Jerneh is currently 80% owned by Jerneh Asia and 20% owned by Paramount Global Assets Sdn Bh.

Jerneh and the foreign parties have applied to BNM to proceed on negotiations.

Source: Bursa, Business Times

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

Talk to acquire STMB ended

Abu Dhabi-Kuwait-Malaysia Strategic Investment Corp has pulled out from talk to acquire not more than 49% of STMB citing reason: "it is no longer conducive due to changes in economic conditions".

Source: Business Times

Summary of STMB's news

There has been a fair bit of news in the past few days on STMB following its launch of new logo and its AGM. Here is a summary:

• No, it will not announce new equity partner by month end
• It will restructure PT Syarikat Takaful Indonesia by winding up the holdings company, and have direct exposure in PT Asuransi Takaful Keluarga (assurance) and PT Asuransi Takaful Umum (general takaful) and offering up to 30% equity to a local Islamic bank with distribution tie-up
• It will spend RM15 mil in re-branding

Source: Business Times 1, 2, 3 & 4, The Star

4 parties interested in Pacific Insurance

The Edge Weekly reported that there were 3 foreign and 1 local companies interested in acquiring Pacific Insurance. No names were mentioned in the report however.

Source: The Edge (not available online)

Manulife yet to decide on partner

Manulife has yet to finalise its partner in the application for the new takaful licence. To justify its investment in the new licence, Manulife would need to attract 500,000 customers in 5 years.

To target the mass market, Manulife will engage multiple distribution partners such as banks, telecommunication companies, hypermarkets etc.

Source: Business Times

Aviva looks to expand into Indonesia

Aviva is not keen to acquire assets from AIG as the price is not attractive. Instead it is looking to expand into Indonesia. Integrating Aviva with AIA would also be tricky as Aviva uses bancassurance and independent financial advisers while AIA is agency dominant.

Source: Business Times

UOB Life to be sold

United Overseas Bank plans to sell UOB Life and Prudential and Manulife are interested. The sale could raise US$500 mil.

Source: The Star, Business Times

EON bank considers acquisition of insurer

EON Bank is in active talks to either acquire a stake in or form a joint venture partnership with insurer to strengthen its bancassurance business.

EON Bank's preferred partner is a composite insurer, the bank is strong in hire purchase and housing loans and a composite insurer will fit in the picture well.

Target: Bancassurance and other non-interest income to contribute 25 - 30% of its revenue.
Current: 20%
Timeframe: 3 years

Previous related posts:

1. EON Bank interested in MCIS Zurich
2. Acquisition of MCIS to be completed by Sept 2009
3. EON Bank will not acquire MCIS
4. PacificMas ceases talks with Aureos and EON
   
   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

How much is Oriental Capital Assurance

How much is Oriental Capital Assurance (OCA) worth? This is exactly what Koperasi Nesa Pelbagai Bhd (the minority shareholder of Maika Holdings Bhd) wants to know.

Maika owns 74.165% of OCA and is disposing of OCA. Nesa owns 0.5% of Maika.

Nesa's chairman is Datuk L. Meyyappan, previously CEO of MCIS Zurich before he retired from the position.

Source: Business Times

Great Eastern to dilute

The Edge Weekly reports that Great Eastern Malaysia is not to be listed but is seeking local investors to dilute its shareholding to 70%, as required by the regulations. Potential investors are EPF and PNB.

Source: The Edge Weekly (not available online)

Merger of Institute and Faculty fails

The proposed merger of Faculty and Institute of Actuaries has failed to secure the minimum required votes from the members. 73.5% of members of the Faculty of Actuaries voted in favour, exceeding the two-thirds majority required. However, only 71.6% of members of the Institute of Actuaries voted in favour, falling short of the 75% minimum required.

Earlier post

Source: IPE

Second-round bidders for Nan Shan

The following are the bidders which have successfully moved into 2nd round in the bid for Nan Shan:

• Carlyle
• Bain Capital / Chinatrust
• Primus Financial
• MBK Partners
• Fubon Financial Holding Co Ltd

Foreign bidders in 2nd round will have to form a consortiums with a local partner.

Earlier post: 10 bids for Nan Shan

Source: Business Times

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

Friends Provident rejects takeover offer

Friends Provident rejected a £1.7 billion takeover offer from Clive Cowdery’s Resolution Ltd as the offer was too low.

Source: Business Times

Maybank in talks with partners on takaful

Maybank is still in talks with partners abroad to expand its takaful business. Earlier, Maybank called off a plan to establish an international Takaful holding company with ICD.

Source: The Star, Business Times

10 bids for Nan Shan

Nan Shan Life, the AIG owned insurance unit in Taiwan, has received 10 bids from various parties including:

• Kohlberg Kravis Roberts
• MBK Partners
• Affinity Partners
• Cathay
• Chinatrust
• Fubon
• Ruentex
• Carlyle
• Primus Financial Holdings

The bids for Nan Shan range from US$1.7 bil to US$2.5 bil.

Source: Business Times

Pacificmas talk rejected

For an undisclosed reason, BNM has rejected Pacificmas' application to commence talks with a local party (undisclosed identity) for the disposal of The Pacific Insurance Bhd.

Earlier story

Source: The Star

Local entity may buy Pacific Insurance

Pacificmas has a good chance to dispose of its general insurance unit, Pacific Insurance, to a local unnamed entity. The entity is said to be willing to accept PacificMas' asking price and the deal is pending approval from BNM.

Other information on Pacific Insurance:

• Book value as at 31/3/2009: RM123 mil

Under BNM's regulations, a company can only operate 1 insurance licence in Malaysia. OCBC owns Overseas Assurance Corporation (OAC) and Pacific Insurance in Malaysia. The deadline is October 2009 to dispose of Pacific Insurance or merge the 2 insurance entities.

Related stories: PacificMas' negotiations with other parties.

Source: Business Times

Nan Shan is now cheaper

Nan Shan Life, the insurer in Taiwan 95% owned by AIG is now cheaper by US$200 to 500 mil valued at US$1.8 to 2 bil. 3 parties have expressed interest:

• Fubon
• China Life
• A global private equity firm

Source: Business Times

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

HLA to negotiate with Mitsui on strategic partnership

HLA has obtained BNM's approval to commence negotiation with Mitsui Sumitomo Japan towards a potential strategic partnership.

Source: The Star, Business Times

IPO of AIA

AIG after failing to sell AIA privately last year for up to US$20 bil is preparing to list AIA through an IPO in Hong Kong. The IPO targets to raise US$4 bil for 20% of stake in AIA.

AIA is present in 13 Asian markets. More statistics on AIA.

Source: The Star

EON Bank will not acquire MCIS

EON Capital Bhd says its unit EON Bank Bhd has stopped talks to buy 40% of MCIS Zurich Insurance Bhd.

Earlier, it was reported that the acquisition would be completed by September 2009.

Source: Business Times

Establishment of international Takaful holding company called off

After completion of feasibility study, Maybank has decided not to proceed with the establishment of an international Takaful holding company with Islamic Corporation for the Development of the Private Sector (ICD).

Source: Business Times

Foreign ownership up to 70%

It is confirmed that the financial sector is to be further liberalised. Foreigners will be allowed to own up to 70% equity in insurance companies.

9 new bank and insurance licences will also be issued to world-class players from 2009-2011.

Source: The Star

Earlier post

Liberalisation in insurance/takaful industry?

Business Times quoting industry source reported that the caps on foreign equity participation in the insurance/takaful sector would be lifted.

Current caps are:

• 49% for existing foreign shareholders
• 30% for new foreign shareholders

New takaful licences may also be issued.

Source: Business Times

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

ACR considers strategic alliance with Islamic reinsurer

ACR ReTakaful SEA said that the company was in talks to enter into a strategic alliance with an Islamic reinsurer in Malaysia, which would likely take place in September.

The company also estimated yearly growth for takaful at 20% in Malaysia and up to 15% in Indonesia.

Source: Business Times

PanGlobal's licence revoked

PanGlobal Insurance will have its licence revoked with effect from 13/4/2009, after the approval for its sale to TMIM is granted.

Source: Bursa

ING to sell as many as 15 businesses

ING plans to raise as much as 8 bil euros by selling assets to boost capital. The asset sale will be over time and as market conditions permit and as many as 15 businesses will be sold.

Source: Bloomberg

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

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

Acquisition of MCIS to be completed by Sept 2009

EON Bank is expected to be MCIS Zurich's new major shareholder by end of Sept 2009. EON Bank is acquiring up to 40% of MCIS Zurich.



Current shareholding structure:

• Koperasi MCIS: 43.7%
• Zurich Financial Services: 40%
• 4,000 minority shareholders: 16.3%

Business statistics on MCIS Zurich:

• Life insurance market share: 3.2%
• General insurance market share: 1.7%
• Pre-tax profits: RM44.6 mil (2008), RM30.4 mil (2007)
• Revenue: RM733.3 mil (2008), RM731.6 mil (2007)
• Total assets: RM3.1 bil (2008), RM2.9 bil (2007)

Earlier story on acquisition of MCIS Zurich.

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

CIMB Sun Life

CIMB Group and Sun Life Financial will form a joint venture called CIMB Sun Life to operate in Indonesia. The joint venture will offer bancassurance products through CIMB Niaga.

Source: The Star

No plan to sell stake in AIG General

AIG General Insurance Bhd does not plan to sell a stake in the company and in fact is open to acquire other general insurers. However, the focus is for internal growth with objective of achieving 5% growth in 2009.

Other statistics on the company:

• plan to double its size and profit by 2012
• 2008 gross written premiums: RM494.7 mil (30% motor, 20% PA/travel, rest: commercial lines)
• 2008 net profit: RM36.9 mil (14% lower compared with 2007)
• 2007 gross written premiums: RM442.6 mil
• Agency size: 2,500, 20% growth target in 2009
• Solvency ratio: 220%, paid-up capital: RM310 mil (RM220 mil in liquid assets and cash)

Source: Business Times

AIA to be split from AIG

AIA will be separated from AIG and put into a specially created separate legal entity, subject to regulatory approvals.

In a move to convince policyholders, AIA announced that it had a solvency ratio on a pro forma basis of >200% of regulatory requirements as of 30/11/2008 and with A+ rating from S&P.

Other statistics on AIA across 13 Asian markets:

• >US$60 bil assets under management
• >250,000 agents, >52,000 agents recruited in 2008
• 20,000 employees
• 20 mil customers

Meanwhile, 2 bidders (Prudential and Manulife) for AIA bidded well below AIG's target of US$20 bil. AIG will consider an IPO.

Source: The Star

Philamlife will not be sold separately

AIG has scrapped a separate sale of Philamlife and will make it part of AIA group. Presumably it will be sold together with the rest of the AIA group.

Source: Bloomberg

Affin to acquire stake in BH Insurance

Affin will commence preliminary negotiations soon with Felda Holdings Bhd to acquire the latter's equity interest in BH Insurance after receiving green light from BNM.

Source: The Star

Update on Mergers

1. China Life afterall is not bidding for AIA.
2. Eon Bank said it was still in talks to buy stake in MCIS Zurich.

Source: Business Times

China Life has not pulled out from AIA's bid

China Life apparently has not pulled out from the bid for AIA, contrary to yesterday's report. CIRC's Vice Chairman said that China Life's discussions with AIG were ongoing, with no results yet.

AIG and US authorities are also in advanced negotiations to divide the company into 3 divisions: AIG's Asian operations, AIG's international life insurance business and US personal lines, AIG Direct.

Source: Forbes

Bid for AIA closes on Friday

The 1st round of bidding for AIG's business in Asia closes this Friday. Apparently there are 3 parties that are interested: Temasek, Manulife and Prudential. Bank of China and HSBC have apparently dropped out. It was reported that Prudential may not be able to meet the Friday deadline.

AIG has also changed their mind and would now consider selling more than 49% of its stake in AIA, effectively surrendering the control to the successful bidder.

The whole stake of AIA is valued at US$20-30 bil.

Source: CNN Money, Reuters, The Star

Prudential disposes Taiwan's business

Prudential Taiwan is selling its agency business to Taiwan's China Life, and in turn Prudential will invest in 10% stake in China Life. Prudential is keeping bancassurance and telemarketing business in Taiwan.

Source: Reuters

PacificMas ceases negotiations with Usaha Tegas

Pacificmas announced that it has ceased negotiations with Usaha Tegas Sdn Bhd on the proposed disposal of The Pacific Insurance Berhad.

At one stage, Pacificmas was in negotiation with 4 parties (Aureos Capital Bhd, EON Bank Bhd, ACE and Usaha Tegas). Even earlier, OSK was involved. All negotiations apparently have ceased. So what is the plan going forward?

Source: Bursa Malaysia, TAS Blog

Shortlisted bidders for Philamlife

AIG has apparently shortlisted 4 potential buyers for Philamlife. The 4 bidders are:

• Bank of the Philippine Islands (partners Prudential Plc)
• Banco de Oro Unibank (partners Assicurazioni Genrali SpA and Jerneh Asia Bhd)
• Manulife Financial Corp
• Unidentified

Source: The Star

Strategic investors for AIA Malaysia

AIG may seek strategic investors for its Malaysian life insurance unit. Prudential is monitoring AIG's disposal programme and is interested in China, Hong Kong, Japan and Malaysia.

Source: Business Times

No concrete merger plan for HLA yet

HLA confirmed that it was not in talks with Tokio Marine & Nichido Fire Insurance Co. on potential disposal of stake to the latter. HLA's capital adequacy ratio was also comfortably above 130%.

However, HLA would consider strategic tie-up and had been approached by several companies although nothing was concrete.

HLA is targeting 3% gross premium growth for FYE June 2009.


Source: Business Times 1 & 2, The Star

PacificMas ceases talks with Aureos and EON

PacificMas has ceased all negotiations with Aureos Capital Ltd and EON Bank Bhd on the disposal of its stake in The Pacific Insurance Bhd.

It is believed that the only party left in negotiation with PacificMas is Usaha Tegas Sdn Bhd.

Source: The Star

EON Bank interested in MCIS Zurich

EON Bank Berhad has obtained BNM's approval to commence discussions with the shareholders of MCIS Zurich on the proposed acquisition of up to 40% equity stake in MCIS Zurich.

Source: Bursa Malaysia

Stake in HLA to be sold?

Hong Leong Financial Group Bhd does not rule out "strategic partnership/alliance options with potential partners that could assist HLA to expand and grow its business".

It was earlier reported that HLFG was planning to sell a stake in HLA to a well capitalised foreign company. Tokie Marine & Nichido Fire Insurance Co Ltd was rumoured to be a potential partner.

Source: Business Times, Bursa

Non-life merger in Japan

Japan's No. 2 (Mitsui Sumitomo), No. 4 (Aioi) and No.6 (Nissay Dowa) general insurance companies are in talks to merge. A basic agreement could be reached by March 2009, pathing the way for the formation of the largest non-life insurance company in Japan, surpassing No. 1 Tokio Marine.

Source: The Star

News in Brief - Dec 23, 2008

1. Commerce Assurance Bhd's general insurance business will be transferred to Alllianz General Insurance Company (M) Bhd on 1 Jan 2009.
2. Manulife Asset Management (M) Sdn Bhd (MAMM), the asset management arm of Manulife Holdings Bhd, will launch 3 funds: equity, fixed income and syariah-compliant.
3. Mohd Fauzi Yaakub is the new CEO for Uni.Asia General Insurance Bhd. Fauzi became COO for the same company in April 2008.

Source: The Star 1 & 2, Business Times

EON Bank Interested in Insurance Company

EON Bank targets to buy an insurance company by mid 2009. It is currently in discussion with at least 3 insurance companies on possibility of acquisition. One of which is Pacificmas.

Source: The Star

Pacificmas ceases negotiations with ACE

Pacificmas has ceased all negotiations with ACE Group of Companies including ACE Synergy Insurance Berhad in the proposed disposal of the entire issued and paid-up capital of The Pacific Insurance Berhad.

It is understood that Pacificmas is still in negotiations with 3 other parties.

Source: Bursa Malaysia

MSIG Keen on M&A

MSIG Insurance (M) Bhd is keen to pursue M&A strategy in Malaysia. The company acquired Aviva Insurance Bhd 2 years ago and does not rule out further acquisitions.

Other information on MSIG:

• No. 1 market share in marine cargo insurance (22.2%)
• No. 1 market share in Fire insurance (10.6%)
• Distribution channels: agency (35%), direct business (23%), motor business (14%), broker business (9%), bancassurance (7%)
• Gross premiums: RM710 mil (2007), RM702 mil (2006)

The current CEO, Song Yam Lim, will retire end of the year and Executive Director, Kenichi Fukuhara, will take over as the new CEO effective 1 Jan 2009.

Source: The Star

STMB Launches Wakalah-Based Products

Syarikat Takaful Malaysia Berhad (STMB) launched 4 wakalah-based products yesterday: Takaful MyMedicare, MySiswa, MyImpian and MySinar. STMB is moving from mudharabah to wakalah model to be more competitive. The company is also planning to launch 4 more wakalah-based products next year.

Other news on STMB:

• Its unit in Indonesia PT Syarikat Takaful is seeking a strategic banking partner to take up a 30% equity stake by end-2009
• BNM has approved the injection of capital of RM21.825 mil into PT Asuransi Takaful Keluarga to address the minimum solvency ratio requirement deficit under the RBC framework of Indonesia

Source: The Star, Bursa, Business Times

AmAssurance Surrenders Composite Licence

AmAssurance will surrender its composite insurance licence from 1 December 2008 with creation of 2 separate entities: AmLife Insurance Berhad and AmG Insurance Berhad carrying out life insurance and general insurance respectively. AMAB Holdings Sdn Bhd is the new holding company for these 2 entities.

Meanwhile IAG will increase its holding in AmG from 30% to 49% and dispose off its 30% holding in AmLife to Friends Provident. The transaction prices are:

• 19% of AmG: RM141 mil
• 30% of AmLife: RM170 mil

Source: Bursa Malaysia

ING registered strong growth

ING has registered 37% growth in new business weighted premium in 2008, contributed strongly by its single premium business, presumably as a result of bancassurance tie-up with Public Bank.

ING's other business targets and performance:

• Pre-tax profit target for 2008: RM277 mil (2007: RM286 mil)
• 11.3% market share up to Q2 2008, 3rd largest
• 43.6% market share in group business and employee benefits
• Premium target for 2008: RM770 mil
• May partner an existing local takaful player
• Possibility of "right-sizing" support functions to save costs

Source: Business Times 1 & 2, The Star

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

Allianz pulls out from proposed acquisition of Tahan

Allianz announced that it has decided to discontinue the discussion and negotiation with Idaman Unggul Berhad on the proposed acquisition of Tahan Insurance Malaysia Berhad.

Source: Bursa

Foreign parties interested in stake in Takaful Ikhlas

The Malaysian Reserve reported that 3 international insurers and an international bank are interested in acquiring a stake in Takaful Ikhlas. However, MNRB has not made a decision on the sale of a stake in Takaful Ikhlas yet. Takaful Ikhlas is looking for a foreign partner that can help it to expand overseas.

Source: Reuters

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