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

BNM assumes control of Tahan

BNM has assumed control of Tahan Insurance Malaysia Bhd as the latter failed to comply with capital requirements and non-fulfilment of the capital restoration plans. PwC has been appointed to assume control of the insurer and the aim is to turn around the insurer within a year.

Tahan had a shortfall of RM29.22 mil in capital as at end of 2006, failing to meet the absolute minimum capital of RM50 mil. It is understood that Tahan's CAR is 100%, below RBC minimum CAR of 130%.

Related stories: Resignation of Tahan's CEO, Various M&A proposals on Tahan

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

Resignation of 3 CEOs

3 insurance CEOs have recently resigned:

• Cliff Lee, Tahan Insurance Malaysia Bhd
• Vincent Kwo, AXA Affin Life Assurance
• Mohd Fauzi Yaakub, Uni.Asia General Insurance Bhd

Cliff Lee was also PIAM's chairman previously. The position has been taken over by the then deputy chairman Mohd Yusof Idris, CEO of Oriental Capital Insurance Bhd.

Some industry statistics:

• Gross premiums for GI: RM11.32 bil (2008) vs RM10.45 bil (2007), growth rate: 8.37%
• NB premiums for Life: RM7.13 bil (2008) vs RM7.6 bil (2007), growth rate: -6.2%

Source: The Star

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

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

One Less Suitor for Tahan

Shriram Capital Ltd has pulled out from the negotiation to acquire Tahan. Meanwhile Tokio Marine continues to be in negotiation with Idaman Unggul on the acquisition of Tahan.

Source: Bursa Malaysia

Tokio Marine Interested in Tahan

Tokio Marine Asia Pte Ltd has expressed its interest in acquiring the general insurance business of Tahan. BNM has given approval for Tokio Marine to enter into negotiations with Tahan.

Source: Bursa Malaysia