Allianz Malaysia Bhd welcomes the recent deregulation of bank distribution of insurance products but expects some short-term squeeze in margins as the industry adjusts to the new rules. Chief executive officer Alexander Ankel said the changes recently announced by Bank Negara, specifically with regards to bank distribution, “is something that we welcome because it allows us to broaden our bank distribution capabilities.”
“Other than that, we want to be a reliable insurer to our partners and customers providing products from A to Z,” he said after the company AGM yesterday.
In April, Bank Negara announced a liberalisation package for the financial sector.
Changes for the insurance industry included the issuance of new family takaful licences with higher limits of up to 70% on foreign equity participation in insurance companies and takaful operators, and incentives for the consolidation and rationalisation of the insurance industry.
They also included the removal of restrictions on the establishment of branches and bancassurance tie-ups, and greater flexibility to employ specialist expatriates.
Ankel said the bancassurance deregulation allowed insurance companies to work with more than one bank and simultaneously allowed banks to work with more than one insurance company.
Prior to the change in regulations, the insurer had already been expanding bancassurance as a new channel of distribution, he said, pointing to Allianz’s existing partnership in general insurance with the CIMB group and in life insurance with Alliance Financial Group Bhd.
Allianz’s life insurance business through bancassurance is among the fastest growing in Malaysia, growing in double digits for the financial year ended Dec 31, 2008 and 18% to 19% in its first quarter ended March 31.
“Subsequently, it also means there will be pressure on margins, more competition and for a short period of time, opportunistic behaviour in the market which we will not participate in,” Ankel said.
“We are looking for sustainable partnerships with banks that grow over the years and we don’t just want to be a product provider and throw one product to this bank and another product to that bank; we are not going to play that game.”
On other aspects of deregulation, Allianz General Insurance Company (M) Bhd chief executive officer Ng Hang Ming said Allianz did not intend to open any new branches this year, but would continue its initiative to combine its life and general insurance branches.
Last year, branches in 10 cities in Malaysia had been consolidated and another seven are scheduled to follow suit this year.
The company was also not considering any mergers or acquisitions at this time, said Ankel.
As for the two family takaful licences expected to be open for tender in October, he said Allianz had not made “a strategic decision at this time,”
“Are we seriously considering it? Yes,” he added.
--staronline
No comments:
Post a Comment