KUALA LUMPUR: Allianz Malaysia Bhd, despite failed merger with HSBC Amanah Takaful a year ago, is still keen to acquire a takaful business, said Allianz Malaysia chief executive officer Zakri Khir.
"We're still interested in the takaful business but there is nothing on the table, as yet," he told NSTP Business in an interview.
He noted there is bright takaful business growth potential because the penetration rate in Malaysia is just 15 per cent.
This ratio is comparatively low to the average 55 per cent of other type of policies.
Zakri was speaking to reporters after Allianz Malaysia sealed a partnership with insuretech start-up PolicyStreet to offer potential clients to purchase insurance policies via online.
Under this partnership, four Allianz digital products will be offered on PolicyStreet’s digital platform namely Enhanced Road Warrior, Smart Home Cover, Allianz Travel Care and Allianz Flight Care.
“By integrating with Allianz, we are now able to offer convenience and flexibility to our customers to obtain Allianz’s products online,” said PolicyStreet chief executive officer Lee Yeng Ming.
In celebration of the partnership, Lee said PolicyStreet is offering up to a 50 per cent discount on Allianz’s protection products obtained from www.policystreet.com until April 30, 2018.
In 2009, Bank Negara allowed foreign equity participation in insurance companies and takaful operators to increase from a limit of 49 per cent to 70 per cent.
At that time, the central bank said a higher foreign equity limit beyond 70 per cent for insurance companies is allowed on a case-by-case basis for those which can facilitate consolidation and rationalisation of the domestic insurance industry.
Bank Negara had recently reminded foreign insurers which fully own their business here of the June 2018 deadline to pare down their shareholding to 70 per cent.
Tokio Marine Holdings Inc together with two of the largest insurance companies in Malaysia — AIA Group Ltd and Great Eastern Holdings Ltd — are among the foreign companies that have wholly-owned general insurance and life insurance operations in Malaysia.
When asked to comment, Zakri said German insurance giant Allianz SE has complied with the ownership cap through a listing on the Bursa Malaysia, the local stock exchange, since 2007.
As of date, he said the parent owns 66.4 per cent of listed entity Allianz Malaysia.
This is well below regulator Bank Negara's rule that foreign insurers can only own a maximum of 70 per cent in the insurance business here.
“Allianz complies and is within the foreign ownership threshold set by Bank Negara,” Zakri said.
In 2017, Allianz Malaysia's profits fell 7.7 per cent to RM287.96 million from RM312.13 million on the back of 2.6% rise in revenue from RM4.68 billion to RM4.8 billion.
Zakri said Allianz Malaysia, just like other insurers, was impacted by Bank Negara's detariffication of motor and fire insurances from July 1 2017.
"It's part of the growing pains which all insurers are bracing. We expect 2018's outlook to be flat," he said.