KUALA LUMPUR: Zurich Financial Group Ltd (Zurich), Switzerland’s biggest insurer, has not ruled out venturing into the takaful business in Malaysia.
“If an opportunity arises in Malaysia, then we will definitely consider it,” said Chee Cheong, chief executive officer of Zurich Insurance Malaysia Bhd, the local insurance arm of the Swiss insurance giant.
He said from a strategic view point, a takaful arm “gives an added bench strength and access” to the lucrative market.
“I think it (takaful) would actually make us strategically a lot stronger and yes, we are interested to get into the takaful market,” he said.
However, he said, it is rather unlikely to expect Bank Negara Malaysia to issue new takaful licence after giving out new licences to four new players in 2009.
Nevertheless, he suggested that there maybe opportunities when the takaful industry adopts the Risk Based Capital framework in 2014.
By then, takaful operators that do not meet the minimum capital requirement would either have to inject more capital or consolidate.
“If the capital requirements (in the takaful industry) are increasing, then it may present us with an opportunity,” he added.
Malaysia’s contribution to the global takaful industry is expected to increase to US$ 2.4 billion (RM7.4 billion) this year from US$ 1.4 billion (RM4.3 billion) in 2011, according to Ernst and Young.
However, Chee said takaful business in Malaysia is still small in terms of scales compared with Indonesia.
“In my personal view, if you go into takaful then you need to think outside Malaysia because the local takaful market is small. But if you do Malaysia and Indonesia at the same then you have the scales,” he said.
Malaysia’s contribution to the global takaful industry is expected to increase to US$ 2.4 billion this year from US$ 1.4 billion in 2011.
Although Malaysia’s takaful market is growing at 20-25 per cent annually, it still has plenty of room to grow as the penetration rate is still low, at about 11 per cent.
Meanwhile, Zurich’s chief executive officer Martin Senn said discussions are still ongoing with Koperasi MCIS Sdn Bhd on its exit plans.
Zurich will have to relinquish its 40 per cent stake in MCIS Zurich Insurance Bhd after buying another composite insurer, MAA Assurance Bhd, for RM344 million.
He said a mutual grace period has been set between both parties, as well as Bank Negara but refused to say when a solution can be expected.