INDONESIA - TAKAFUL - Syarikat Takaful may go for M&As to secure bigger market share

www.thestar.com.my -PETALING JAYA: Syarikat Takaful Malaysia Bhd will focus on its core markets in Malaysia and Indonesia but does not rule out the possibility of mergers and acquisitions (M&As) in a bid to have a stronger foothold and a bigger market share in the takaful business.
Goup managing director Datuk Mohamed Hassan Kamil (pic) told StarBiz the company was now concentrating its efforts in growing the Malaysian and Indonesian market organically.
“Any M&A activities will be deliberated at our holding company level. Our main focus is to grow the business in Malaysia and Indonesia while continuously working hard to gain the top position and increase our market share.” (source)

Datuk Mohamed Hassan Kamil

“We are optimistic about these two markets and believe we will be able to sustain our growth with our continued success over the recent years. The company will continue to carefully consider all options and pursue the course of action that will best benefit the group,” he said.
Takaful Malaysia currently has a 56% stake in PT Syarikat Takaful Indonesia, which in turn holds majority stakes in PT Asuransi Takaful Keluarga and PT Asuransi Takaful Umum. To create an efficient corporate structure, the company was looking to consolidate and restructure its shareholdings in Takaful Keluarga and Takaful Umum under one umbrella company.
He said the Indonesian operations currently contribute about 17% of the group's total contributions and less than 5% to its earnings. Hassan said the company believed there was potential for growth in Indonesia and was well positioned to capture the majority Muslim market there.
He said the company was targeting double-digit growth in investment profit from its Indonesian subsidiaries this year.
Recently, Hassan said Takaful Malaysia would look to M&As to grow its market share only after the risk-based capital (RBC) framework for takaful operators was finalised by 2013. Under the conventional framework, insurance companies are required to have a minimum 130% supervisory capital-adequacy ratio.
As of December 2011, Takaful Malaysia was the second largest takaful operator in the country with a market share of about 25% behind Etiqa Takaful which commanded close to 41% of the market.
Based on Insurance Services of Malaysia (ISM) 2011 fourth quarter report, Takaful Malaysia was the only operator among the top three players, to have recorded a growth of 43% and increase in market share by 5%.
The company was the leader in the non-motor general takaful business with a 32% market share and also in group family takaful business with market share of 33%.
On its performance this year despite the tough global economic conditions, Hassan added that barring any unforeseen circumstances, the company expect better performance.
Takaful Malaysia posted a 40.4% jump in profit after taxation and zakat for the first-quarter ended March to RM30.9mil from RM22mil a year earlier, mainly driven by higher surplus transfer from family takaful fund and higher wakalah fee incomes. The group's operating revenue increased by 38.8% to RM429mil from RM309mil previously.
At present, the company has 700 active agents and plans were afoot to add another 1,800 agents by year-end. As for total outlets, Hassan said the company at the moment had 40 outlets, of which, 14 were Takaful myCare Centres (TMCCs), 17 branches, seven Takaful myDesks and two retail centres, adding that another six new TMCCs would be opened this year. With a large customer base of 1.3 million, the company currently manages about RM6.1bil worth of funds.

Source: http://biz.thestar.com.my/news/story.asp?file=/2012/6/5/business/11414687&sec=business  - June 5, 2012