KUALA LUMPUR: MAA Holdings Bhd expects its takaful operations to generate 30% of revenue in the year ending Dec 31, 2007, said group managing director and chief executive officer Tunku Ya'acob Tunku Abdullah.
“With the takaful business, we will also see a substantial increase in our overall business. The impact of takaful business will be significant in 2007 so this year's growth will be similar to last year's,” he told reporters after the company AGM yesterday.
The group, whose operating revenue surged 26% last year, is anticipated to launch its takaful products in August or September after its joint venture company with Bahrain's Solidarity Co BSC received Bank Negara approval in March for a new takaful licence.
The joint venture company is likely to break even immediately, riding on MAA's strong agency network and existing infrastructure. Some 40% of its life agency force are bumiputra agents.
Ya'acob said the group planned to eventually introduce takaful products overseas such as in Pakistan and the Middle East. “One option is to have Solidarity introduce investment-linked takaful products in the Middle East, which is likely to be in two years' time,” he said, adding that it was too early to indicate when expansion to Pakistan would take place.
Ya'acob said turnover for the second quarter would recover after a year-on-year fall in the first quarter ended March 31. The first quarter had a timing problem due to late booking of payments so they would fall into the second quarter, he said.
During the first quarter ended March 31, MAA's revenue dropped to RM601.7mil from RM653mil in the previous corresponding quarter due to lower gross premiums from the general insurance and life insurance divisions. The tightening of monetary policy was expected to slow down the economy and the equity market, hence the group planned to keep bonds on a short-term basis to take advantage of the rising interest rates, Ya'acob said.
On the central bank's move to give more flexibility to foreign insurers to open branches in Malaysia, he said it was unlikely to impact on MAA substantially as “it doesn't really matter for insurers to have branches because agents are everywhere.”
Nonetheless, the industry was expected to see more foreign insurers taking up stakes in local companies, he said, adding that the group was open to “anybody who wants to make a strategic alliance with MAA Assurance” but it had yet to identify a specific party.
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