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.

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

STMB has a new logo

Syarikat Takaful Malaysia Bhd has unveiled a more modern, young and energetic new logo, as part of its RM15 mil rebranding exercise.

STMB is keen to expand to Qatar, Kuwait, Abu Dhabi and China. In Qatar, STMB will collaborate with a local financial institution as part of its plan to penetrate that market.

Source: The Star

STMB's strategies to increase market share

STMB aims to achieve 50% market share in 2-3 years' time from the current 40% by implementing the following:

• Introduction of competitive and innovative products
• Expansion of distribution channels
• Moving into multi-racial target market
• Increase its visibility and brand awareness with RM15 mil rebranding exercise

Source: The Star

STMB rebrands

STMB will spend RM15 mil to rebrand with the goal to achieve 50% market share.

Related story: STMB eyeing more than 50% market share

Source: Business Times

STMB eyeing more than 50pc market share

STMB is eyeing more than 50% market share (by what measure?) and has identified general takaful and retail family market as the key growth drivers.

The following 3 new takaful products will be launched for FY 6/2010:

• Takaful myGraduan (protection and savings plan)
• Takaful myInvest (protection and investment plan)
• Takaful myGemilang (retirement plan)

The advantages of liberalisation according to STMB are:

• Increased innovation in products
• New technology

The disadvantages are:

• Market share of existing players reduced
• Staff pinching

Source: The Star

Takaful Malaysia distributes through Standard Financial Planner

Takaful Malaysia signed an agreement with Standard Financial Planner Sdn Bhd for the latter to distribute its products.

Information on Standard Financial Planners:

• 1 of the 10 licensed financial advisors in Malaysia
• Operates across 7 countries
• > 300 representatives in Malaysia
• 75% of the representatives are licensed financial advisors with BNM

Some information on Takaful Malaysia:

• Aims to increase revenue by 10% through the distribution agreement
• Total assets: RM4.05 bil. Industry: RM11 - 12 bil.
• Aim to have >50% market share in terms of assets within 2 years
• Celebrate 25th anniversary in December, plan a rebranding exercise

Source: Business Times, The Edge, The Star

STMB wants to overtake Etiqa Takaful

STMB has set itself a target to overtake Etiqa Takaful as the largest takaful player in Malaysia by asset size within 2 years. STMB in the launch of one-stop Takaful myDesk with Lembaga Tabung Haji (LTH) also sets the following goals:

• Sign up 10% more contributors within 1 year
• Achieve RM1 mil contributions within 1 year

Takaful myDesk is along the concept of bancatakaful but instead of using a bank, in this case LTH is used as the distribution and service channel.

Source: Business Times, The Star

Securitisation of takaful contributions

STMB has suggested the possibility of securitisation of takaful contributions. It cautioned that the idea is subject to thorough study including consideration of syariah issues.

It is not clear how the following issues are to be addressed for the securitisation to work:

• Takaful participants are not contractually liable to pay future contributions. This is unlike securitisation of say car loans where the instalments are contractual.
• Investors of such securitised instrument also take on the mortality risk. Since they are not insurance company, are they in a way undertaking insurance activities without an insurance licence?

Source: The Star

TakafulmyJalinan

STMB has branded its corporate responsibility programme TakafulmyJalinan. Under this there are 2 sub-brands:

• myJalinan~Ilmu (addressing children's education)
• myJalinan~Kasih (addressing poverty)

A new sub-brand called myJalinan~Alam will be launched to focus on activities related to the environment.

Source: The Star

Takaful Malaysia reprimanded by Bursa

Syarikat Takaful Malaysia was reprimanded by Bursa Malaysia for a deviation of >10% between their unaudited and audited results for the 4th quarter.

Takaful Malaysia reported an 18.2% higher profit after tax and minority interest compared with its unaudited results for the quarter ended 30/6/2008.

Source: Business Times

STMB outsources IT to HP

STMB has outsourced its IT infrastructure operations management services to Hewlett-Packard. The deal is RM12 mil for a 3-year contract.

Source: Business Times

30% Growth Target for STMB

Syarikat Takaful Malaysia Berhad has set an ambitious 30% growth target despite the gloomy economic environment.

Source: Business Times

STMB is confident despite economic slowdown

Syarikat Takaful Malaysia Berhad (STMB) is confident that it will not be impacted by the economic slowdown because:

• Its service is of necessity and slowdown-proof
• It invests conservatively

For its latest 5-year capital protected product, Al-Afdhal, it is targeting contributions of RM100 mil. Distribution will be through agents as well as Bank Islam Malaysia Bhd, sister company of STMB.

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

STMB to launch a range of products

Syarikat Takaful Malaysia Berhad (STMB) will launch a range of highly competitive takaful products by year-end, to commemorate its 25th anniversary in 2009.

Source: Business Times

STMB Profit Adjusted Up RM4.6 mil

Syarikat Takaful Malaysia Berhad (STMB) has a positive adjustment to its previously released results by an amount of RM4.6 mil.

Unaudited profit: RM25.1 mil
+ Overprovision of service tax: RM8.2 mil
- Additional IBNR: RM2.7 mil
- Other adjustments: RM0.9 mil
= Audited profit: RM29.7 mil.

Source: Bursa Malaysia

STMB Declares 15% Mudharabah Payment

Syarikat Takaful Malaysia Bhd (STMB) has declared a 15% Mudharabah payment for participants of its general takaful products and selected family takaful products. The payment was the 3rd this year.

Source: The Star

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

10% Mudharabah Payment

Participants in general takaful products of STMB will receive 10% Mudharabah payment if their certificates expire after March 2007 and if they made no claim in the year concerned.

Source: The Star

Capital Injection into Indonesia

Takaful Malaysia has obtained BNM's approval to inject a capital of up to RM25 mil into PT Syarikat Takaful Indonesia ("STI"), which is 56% owned by Takaful Malaysia. The purpose is to strengthen the capital structure of PT Asuransi Takaful Keluarga (99.9% owned by STI) to meet the minimum solvency requirement under the risk based capital framework.

Source: Bursa Malaysia

No Privatisation

Takaful Malaydia issued 2nd announcement to Bursa Malaysia today (the 3rd announcement in the past 2 days!) and finally clarified that "the Company is not aware of any plan to take the Company private".

The company's share price closed 11 sen down.

Meanwhile, BIMB Holdings Bhd announced that it had obtained approval from BNM to commence negotiations with Abu Dhabi-Kuwait-Malaysia Strategic Investment Corporation on the latter's proposed acquisition of a strategic stake not exceeding 49% in Takaful Malaysia.

Source: Bursa Malaysia 1 & 2

Privatisation is an Option?

Takaful Malaysia has provided more information on the speculation on the privatisation of the company.

Bursa Malaysia posed 2 direct questions to Takaful Malaysia for the latter to confirm or deny:

• BIMB's plan to take Takaful Malaysia private
• Privatisation at between 2 to 2.5 times adjusted book value

Takaful Malaysia's clarified that "the Company has not concluded any discussion that may carry an intention to take the Company private. Discussions on a proposed strategic alliance with relevant parties are still on going and any decision on the matter will be announced in due course.".

The clarification does not seem to confirm nor deny the privatisation plan. I guess we may interpret that privatisation is 1 of the options under discussion and it is too early for details to be disclosed.

Source: Bursa Malaysia

Is Takaful Malaysia to be Privatised?

Syarikat Takaful Malaysia Bhd (STMB) apparently does not want to answer the question directly.

Yesterday an article appeared in The Edge Daily titled "Takaful Malaysia to be Privatised". Today STMB makes an announcement to Bursa Malaysia saying that it "is still discussing with both Abu Dhabi-Kuwait-Malaysia Strategic Investment Corporation (ADKMSIC) and Islamic Arab Insurance Co. P.J.S.C. (SALAMA)" and "no conclusive arrangements have been achieved thus far". The announcement however does not say whether the company is to be privatised or not.

The speculation is the company would be privatised at between 2 to 2.5 times adjusted book value. The net book value as at 31/3/2008 was RM1.95 and today STMB's shares closed at RM1.87, down 12 sen. If the speculation proves to be correct, investors stand to make >100% capital gain!

STMB's Price Chart

Source: The Edge Daily, Bursa Malaysia

Foreign Partners to Help STMB Going Abroad

Syarikat Takaful Malaysia Berhad (STMB) is counting on it new partners to assist the Company to expand outside Malaysia. STMB is currently in talk with Abu Dhabi-Kuwait-Malaysia Strategic Investment Corp and Islamic Arab Insurance Co PJSC for the new partners to take up a 49% stake in STMB.

Some of the benefits the new partners can bring in for STMB include:

• To distribute STMB's products in the Gulf through collaboration with Middle Eastern banks. Applying for a licence in the Gulf is ruled out as the industry there is already competitive.
• With the new fund from the new partners, to channel 1/3 into Indonesia to invest in IT infrastructure and distribution network.
• To explore new markets in China and the UK.

Source: The Edge Malaysia May 5, 2008

STMB 1st Capital Protected ILP

Syarikat Takaful Malaysia Berhad (STMB) will launch its 1st capital protected investment-linked plan - myAL-AFDHAL, next month. Citibank is the structure provider for this product.

Some of the notable features of myAL-AFDHAL are:

• It is on wakalah model (3% wakalah fee), not the normal mudharabah adopted by STMB
• Tabarru' of 0.5% of single contribution for the 5-year term
• Offer period: 2/5/2008 to 15/6/2008
• Minimum fund size: RM50 mil
• Fund management fee of 1% p.a.
• On death, pays higher of unit value of sum covered
• Partial withdrawal will void the capital protection on the remaining fund balance
• Surplus sharing on risk fund is 50:50
• Health declaration for investment up to RM1 mil, medical underwriting otherwise

Source: STMB

STMB's AA (SQR) Rating Withdrawn

Syarikat Takaful Malaysia Berhad (STMB) has its AA Shariah Quality Rating (SQR) withdrawn by the Islamic International Rating Agency (IIRA). The AA (SQR) rating was assigned in May 2007 but not renewed by IIRA.

The non-renewal apparently is due to the resignation of 2 senior management persons from the Shariah compliance department.

STMB has informed IIRA that they are finalising the recruitment of 1 Shariah person.

Sources: AME Info & IIRA

STMB Consolidates

Syarikat Takaful Malaysia Bhd (STMB) will finalise the consolidation of its branches with those of Bank Islam by year end.

The number of branches of STMB will reduce to 70 from the current 100. The benefits of consolidation are cost savings and more effective bancatakaful.

Other initiatives of STMB are:

• Expand alternative distribution channels: corporate agency, tied agents and financial advisers.


• Implement electronic imaging.


• Roll out 1st structured investment product by end of April.

STMB also expects the talk with strategic partners would bear fruits within the next 2 months. Currently 2 potential partners are involved: Abu Dhabi-Kuwait-Malaysia Strategic Investment Corp and Islamic Arab Insurance Co PJSC.

Source: The Star

10% Mudharabah Payment

Syarikat Takaful Malaysia Bhd (STMB) has declared 10% Mudharabah payment to general takaful products participants.

Eligible participants are those holding general takaful certificates that have expired between 1/3/2007 to 31/12/2007 and have made no claims. There was no news on any Mudharabah payment to family takaful participants.

Future payments of Mudharabah are expected to be smoother with the implementation of new system and the re-engineering of business processes.

Last month, a reader wrote to Malay Mail to complain about the delay in getting discount on his motor policy which they company explained was due to the upgrade of system and business processes.

http://tehloohai.blogspot.com/2008/03/takaful-refund-delayed.html

http://www.takaful-malaysia.com/V5/index.php?option=com_content&task=view&id=217&Itemid=1

Takaful Refund Delayed

A Bandar Sri Damansara contributor wrote to the Malay Mail to express his disappointment over the delay in getting discount on his motor policy from Takaful Malaysia.

The contributor was promised 25% discount on the contract from 2nd year onwards.  However, on renewal, he was asked to pay the full contribution.

A company spokesman explained that the delay was due to the upgrading and re-engineering of their IT system and business processes.

http://www.mmail.com.my/Current_News/mm/Thursday/Hotline/20080320032836/Article/index_html