MyCC allegation a misunderstanding, says AIA

KUALA LUMPUR: AIA Bhd, which posted a 23% growth in value of new business (VONB) in 2016, said it has co-operated with the Malaysian Competition Commission (MyCC) and provided the agency the relevant documents in relation to MyCC's investigation on the General Insurance Association of Malaysia (PIAM) and its 22 members.
“We are working to resolve it with the commission. I think there is a misunderstanding between the parties and ultimately the right resolution will come about," said AIA CEO Anusha Thavarajah at a results briefing last Friday.
AIA was one of the 22 organisations of PIAM asked to forward evidence to the commission for the investigation over an alleged participation of the association’s members in an anti-competitive agreement.
The agreement was established with the Federation of Automobile Workshop Owners’ Association of Malaysia whereby the two parties were said to have agreed on fixed discount rates for prices of certain motor parts as well as labour hourly rates for workshops under the PIAM Approved Repairers Scheme.
MyCC proposed a RM213.45 million fine on PIAM and its 22 members, who have 30 days from the receipt of MyCC's proposed decision to make their representation.
Anusha said AIA is among the smaller players in the agreement.
“It is not a very big part of our business, it is a very small part of it, and we are one of the smaller players,” she said.
AIA's VONB rose by 23% to RM815 million in 2016 compared with RM664 million in 2015 due to the growth achieved in all sections. Its annualised new premiums (ANPs) grew by 25% to RM1.4 billion from RM1.1 billion, with the general insurance sector contributing 8% of the ANPs.
The group's operating profit after tax saw a single digit growth of 6% to RM1.10 billion from RM1.04 billion, attributable to the increase in healthcare cost.
The annualised new contribution increased 47% to RM239 million from RM162 million. New takaful business certificates issued rose from 57,000 to 85,000 while takaful policy holders stood at 122,000 as at November 2016.
“Our consistent track record on year-on-year profitable growth is the direct result of the tremendous growth opportunities present in Malaysia, our diversified and resilient business model and our commitment to building a high quality, sustainable business for the long term,” she said.
For 2017, AIA remains optimistic about the growth prospects in the life insurance industry as only 56% Malaysians are insured, far behind Bank Negara Malaysia’s Life Insurance and Family Takaful Framework that targets for 75% insurance penetration.
While continuing to invest in healthcare, AIA is also looking at potential customers in children, women and the high net worth strata of society, with new products it is set to launch. The company will also be setting up branches in Penang, Ipoh and Sri Manjung this year in addition to its 43 branches.