Maybank insurance arm aims to double size by 2020

PETALING JAYA: Maybank Ageas Holdings Bhd, the insurance arm of Maybank Group and the country's fourth largest insurer, aims to double its size by 2020 and has not ruled out acquiring other insurers to boost its ranking in Malaysia, its CEO Kamaludin Ahmad said.
Maybank Ageas is the parent company of Etiqa Insurance Bhd and Etiqa Takaful Bhd in Malaysia.
Kamaludin told SunBiz the company is keen to grow and will consider mergers and acquisitions (M&A) only if the proposition makes sense.
"If a proposal (to acquire) is compelling enough and makes sense to us, then maybe we will do it. But, so far, we will grow organically. However, with the current market situation, just growing organically may not help us to get the big growth we are looking for."
Kamaluddin admitted that for Maybank Ageas to meet its 2020 target organically would be "a bit of stretch".
"That is why we have to keep our eyes open. We do get proposals from time to time but most of them don't make sense," he said.
According to Kamaludin, an attractive acquisition is one with a bigger insurer that will help Maybank Ageas gain in size quickly. "If we can buy something that probably can add 30% in size, at least to us, then it makes sense," he said.
Kamaluddin said the insurer aims to hit the RM6 billion gross premiums mark this year.
He said a big part of Maybank Ageas's future growth will be contributed by its Singapore unit that has seen exponential growth since 2014, when it was turned into a composite insurer providing life and general insurance.
In 2015, in its first full year as a composite insurer, the Singapore arm saw a surge in new business premiums and Kamaludin expects the trend to continue. "No doubt, we started from a lower base but the growth shown in the Singapore ops will continue."
In fact, the Singapore operations accounted for the bulk of Etiqa's 9% growth of RM1.6 billion in the first quarter of this year.
Kamaludin disclosed that 7% of the total 9% growth in the first quarter was from the Singapore unit, and the balance 2% from Malaysia.
"The growth in the first quarter in Singapore was mainly driven by the life business as we managed to retain about 95% of our customers," he said.
The Singapore unit's sales are expected to double to RM660 million this year from RM320 million in 2015.
Since it officially started operations, the unit has emerged as the fourth largest bancassurance company in Singapore and ranked 10th out of the 18 life insurers in that country.
In the Malaysian insurance sector, Etiqa ranks fourth in terms of overall gross premium at RM5.2 billion in 2015, a 4% growth from the previous year, mainly driven by its non-life division.
Both its conventional and takaful business contributed equally to new sales in 2015.
Moreover, in profitability and total assets, the firm ranks third, with pre-tax profit of RM661 million and assets totalling RM27.5 billion in the financial year ending Dec 31, 2015.
Kamaluddin expects Etiqa to grow in "high-double digits" this year.
The company has an agency force comprising over 24,000 agents and 27 branches throughout Malaysia.