KUALA LUMPUR: A local insurance company welcomes the presence of bigger foreign players in the industry saying that competition is unavoidable.
Maybank Ageas Holdings Bhd, the parent company for Etiqa Insurance & Takaful group said the competition between local and foreign insurance companies in Malaysia is still healthy.
“Competition will always be there. We cannot avoid it”.
Maybank Ageas Holdings chief executive officer Kamaludin Ahmad said this on the sidelines of an event at a hotel here, today.
He also agrees with Bank Negara Malaysia’s (BNM) move to start enforcing the existing cap on foreign ownership of insurance companies as the central bank seeks to boost local participation in the industry.
A recent report in Bloomberg said BNM may consider strictly applying the existing policy on foreign companies owning local insurance firms in order to bring down those with 100% ownership down to a maximum of 70%.
Malaysia started to liberalise its foreign ownership rules for insurance companies back in 2009, allowing overseas insurance companies to hold as much as a 70% stake in local firms.
BNM, which has routinely granted extensions to firms that didn’t comply, may be less lenient in the future and require such companies to show they have the country’s best interests at heart, the report said.
BNM governor Muhammad Ibrahim warned last year that foreign insurers “need to contribute more to justify their presence” in the Malaysian market.
Some participants’ undue focus on short-term profits had come at the expense of serving their customers, Muhammad said in a speech in October at an insurance summit in Kuala Lumpur.
BNM data showed AIA Group Ltd, Great Eastern Holdings Ltd and Tokio Marine Holdings Inc are among foreign companies that have wholly-owned general insurance and life insurance operations in Malaysia.
They compete with local participants, including Maybank’s Etiqa Insurance unit and Tune Insurance Malaysia, which is backed by tycoon Tony Fernandes.
Earlier, Kamaluddin attended the agreement signing ceremony between Etiqa and the National Cancer Society Malaysia (NCSM).
The agreement worth RM1.67 million over a span of a year is for Etiqa to provide free mammogram services to 5,000 underprivileged women aged 40 and above, across the country.
This national initiative is part of Etiqa’s corporate social responsibility (CSR) commitment towards healthy living, under its Etiqa Cares flagship programme.
Also present at the ceremony were NCSM patron Rafidah Aziz, Etiqa Insurance Berhad and Etiqa Takaful Berhad chairman R Karunakaran, and NCSM president and medical director Dr Saunthari Somasundaram.