GE Takaful eyes top 3 spot in Indonesia

KUALA LUMPUR (Nov 28, 2011): Great Eastern Takaful Sdn Bhd (GE Takaful) has unveiled a plan to become one of Indonesia's top three takaful players in three to five years, by introducing affordable takaful plans and leveraging on its bancatakaful distribution partnership with Bank OCBC NISP there.

Its CEO Mohamad Salihuddin Ahmad said the company will venture into the republic next year, initially in Java and Sumatera. It will then enter other areas such as Kalimantan and Sulawesi.

"We have been going in and out of Indonesia for a year. We feel that Indonesia is the right place for us to expand our takaful business because it has a population of over 220 million, of which some 90% are Muslims. I think it is the right place for us to promote our products," Mohamad Salihuddin told SunBiz in an interview.

Takaful penetration in Indonesia is currently less than 1%.

"We have done all the necessary work and research. Based on our timeline, we are looking at venturing into Indonesia in February next year or latest by April," he said.

"For the last six months, we have been going to Indonesia to identify the right partner, model and product. Our first job is to focus on the mass market because many players there are currently playing up investment-linked products targeted at the middle- to upper-income group. Our first product will be simple and affordable to the majority of Indonesians," he added.

GE Takaful also plans to leverage on its partnership with Bank OCBC NISP to provide bancatakaful products under the second phase of its expansion in the country. The bank has more than 400 branches in Indonesia.

Under the third phase of its expansion, GE Takaful plans to become a full-fledged takaful company there.

"We need to go phase by phase to make our presence felt with minimum cost," said Mohamad Salihuddin.

Besides Indonesia, the company, which is a joint venture between I-Great Capital Holdings Sdn Bhd, a subsidiary of Great Eastern Holdings Ltd, and Koperasi Angkatan Tentera (M) Bhd, is also looking to expand to Singapore, Brunei and China.

The bancatakaful segment currently contributes about 10% of the company's revenue, but Mohamed Salihuddin said with OCBC's expansion plans and its working relationship with third-party banks, that segment is expected to grow to about 20-25% in the next few years.