MAA Group turns Philippine general insurance firm into a subsidiary

MAA Group Bhd CEO/ group managing director Datuk Muhamad Umar Swift (left) and executive director and group chief operating officer Yeo Took Keat (right). The Star/sia Hong Kiau

KUALA LUMPUR: MAA Group Bhd’s (MAAG) unit MAA International Assurance Ltd is increasing its equity interest in associate MAA General Assurance Philippines Inc and turning the general insurance firm into a subsidiary.

In a filing with Bursa Malaysia, MAAG said its Labuan-based offshore insurance and investment arm had paid 300 million pesos (RM26.82mil) on Tuesday to subscribe for additional 300,000 new shares with par value of 1,000 pesos per share in order to boost its stake from the present 40% to 70%.

The proposed subscription is subject to the approval of relevant regulatory authority in the Philippines and Labuan Financial Services Authority. 

MAA General Assurance Philippines is a licensed general insurance company operating in the Philippines.

In the financiasl year ended Dec 31, 2015, the general insurance business in the Philippines contributed a profit after taxation of RM2.5mil to the MAAG group (2014: RM2.1mil).

According to MAG’s 2015 annual report, the higher proit was due mainly to the 37.1% increase in gross premiums to RM114.2mil (2014: RM83.4mil), write-back of impairment loss for insurance receivables due to recoveries and improved investment performance.

MAAG, a Practice Note 17 affected issuer, said the proposed share subscription would not have any effect on its share capital or substantial shareholders’ shareholdings and was not expected to have any material effect on the earnings per share, net assets per share and gearing of MAAG for the financial year ending Dec 31, 2016.

At MAAG’s AGM in June, chief executive officer Datuk Muhamad Umar Swift had disclosed that the company planned to turn MAA General Assurance Philippines into a subsidiary in order to have control of the latter.

However, he said MAAG was not certain of increasing its stake in associate Columbus Capital Pty Ltd, which is involved in the home mortgage business in Australia, to make it a subsidiary.