KUALA LUMPUR: MCIS Insurance Bhd (MCIS Life) has taken up a 4.99 per cent stake in Merchantrade Asia Sdn Bhd through the acquisition of new ordinary shares of an undisclosed amount.
The two companies kicked off a marketing distribution arrangement in 2019 where MCIS Life provided a life insurance protection plan for Merchantrade's customers, including Malaysians and migrant workers.
This strategic acquisition is set to accelerate MCIS Life's digital transformation journey and leverage Merchantrade's digital capabilities, access to an extensive network of over 1,000 physical touchpoints throughout the country and their three million customers.
Merchantrade founder and managing director Ramasamy K Veeran said teaming with an established brand like MCIS Life resonates with the company's goals of expanding
insurance offerings as it allows to develop next-generation products and services better.
"Building from our core businesses with strategic partnerships and collaborations, we will continue to accelerate the rollout of innovative financial services and strengthen our comprehensive ecosystem of related technologies, such as global remittance, payments, e-wallet solution, foreign currency exchange, micro-insurance, telehealth, micro-loans, telco services and more," Ramasamy said in a statement today.
In August 2021, both companies teamed up to provide a product targeted at underserved communities such as Malaysians eligible for the Perlindungan Tenang Voucher (PTV) scheme.
The strategic collaboration has come at an opportune time as the value of life insurance and other relevant financial products have magnified amidst the pandemic.
MCIS Life chief executive officer and managing director Prasheem Seebran said Merchantrade is a fast-growing fin-tech company constantly at the forefront of digitisation and driving innovation in
financial services, thereby allowing the former to pivot on its expertise to pursue its digitally-focused life insurer.
He said MCIS Life's strategy is focused on enhancing customer experience through innovative product solutions and digitised service offerings.
The synergies between the two companies will be further supported by Merchantrade's technology solutions and its foray into the payment space.
"We aim to achieve our targets by rolling out more products to suit Merchantrade's target market, and this strategic alliance is expected to contribute over 25% of MCIS Life's non-agency new business contributions by 2025," he said.
The acquisition forms a bold step forward, further strengthening the existing ties between both companies since 2019.
MCIS Life sees tremendous value in Merchantrade's mobile e-wallet application and nationwide on ground touchpoints, allowing access to underserved communities.
"Currently, MCIS Life is the exclusive life insurance partner of Merchantrade.
"Considering the potential of the company and various opportunities to collaborate and create value for existing and prospective customers, this investment is expected to bring significant value to
us," Prasheem said.
MCIS Life also aims to roll out more inclusive, affordable and straightforward solutions to Merchantrade's underserved customer base, such as Malaysia's B40 segment and migrant workers.
It will also expand its offerings on employee benefits and bespoke products for corporate clients, high-end products for the remittance market and online products for the technology savvy.