PETALING JAYA: Malayan Banking Bhd
’s (Maybank) insurance arm Etiqa is beefing up its sustainability initiatives as the insurer prepares for expansion in Asean.
Chief strategy officer Chris Eng told StarBiz that one of Etiqa’s vision is to ensure all its equity investments would meet its internal environmental, social and governance (ESG) guidelines by 2025.
“Research has shown that ESG-based investment funds have performed better than non-ESG funds, especially when there were market drawdowns, as the sustainability compliance of the funds acts as a form of risk management for the portfolio.
“Hence, it is not just about principles and going green but investing in ESG-compliant portfolios makes sense in the long run.
“Increasingly, as customers and investors demand more sustainability compliance among their fund managers, we will continue to see even more outperformance among ESG investments,” he said.
Having set the company’s sustainability ambitions, Eng said it is now more outward facing, focusing on developing sustainable-linked products.
For example, Etiqa is the first in Malaysia to provide home coverage protection for electric vehicle chargers.
It is also the first in the country to provide online takaful for people with disabilities, and among the first to provide investment-linked policies which are supported by ESG funds.
Etiqa last month became the first insurance and takaful provider in Malaysia to sign on to the United Nations’ Principle for Sustainable Insurance (UN PSI) under the United Nations Environment Programme Finance Initiative.
Currently, Maybank has a 69.05% stake in Maybank Ageas Holdings Bhd, the holding company of Etiqa’s Malaysian and Singaporean entities.
Ageas Insurance International holds the remaining 30.95% stake in Maybank Ageas Holdings.
In terms of expansion, Eng said Etiqa is currently operating in five Asean countries – Malaysia, Singapore, the Philippines, Indonesia and Cambodia.
“We will continue to evaluate opportunities across the region for potential expansion,” he added.
Locally, he said Etiqa is strengthening its operations and customer service to ensure that it delivers on its promise to be “Fast and Easy” to deal with.
Of particular note, he said the company is enhancing its mobile app, which will allow for more services to be delivered at the touch of a finger for the convenience of customers.
At the same time, Eng said the company is providing its intermediaries with more digital tools to facilitate their businesses.
On Etiqa’s performance for the year, he said after an uninterrupted five-year run of record top lines between 2017 to 2021, 2022 was a challenging year as pre-tax profit was impacted by volatile market conditions and product redesign in Singapore.
“However, Etiqa Singapore’s operations have bounced back as it is diversifying towards longer-tenure protection and investment-linked plans with higher margins while investment market volatility has somewhat reduced.
“Hence we can expect recovery and growth this year,” he said.
Eng said the general Insurance industry rebounded in 2022 after a muted two years due to the Covid-19 pandemic.
He sees some continued momentum this year as more sectors of the international economy open up but this would be balanced by a global economic slowdown due to heightened interest rates.
On the flip side, he said while awareness of the benefits of having medical insurance increased after the pandemic, demand for life insurance has been muted over the past few years due to the volatility in investment markets.
As market volatility eases this year, Eng expects demand returning for life insurance in the coming months.
On how the signing the UN’s PSI strengthen Etiqa’s business, Eng said given the longer-term nature of the insurance business, commitments that the company makes now would continue to have an impact on its overall business in the longer term.
“As a signatory to the UN PSI, Etiqa is required to incorporate ESG in our daily business strategy. As such, the decision to embed sustainability into our business now will see sustainability increasingly being part of our business in years to come.
“As the sustainability awareness increases among regulators, customers, investors and business partners, we see that adherence to sustainability principles becomes a must, rather than an option, among more and more companies in the future.
“Therefore, Etiqa’s signing of the UN PSI is our preemptive action to ensure that we are a company of the future,” he noted.
