UK insurer to tap takaful mart with AmBank
By Rupinder Singh
Published: 2008/12/15
UK-listed life and pensions company, Friends Provident plc, is keen to explore the Islamic insurance business in Malaysia.
It recently paid RM170 million for a 30 per cent stake in AmBank’s life insurance unit, AmLife Insurance Bhd.
“Takaful is something that we would like to explore with AmBank in the future. We think there would be opportunity there,” Friends Provident’s international operations managing director Rocco Sepe told Business Times recently.
The takaful market’s fast growth means that it is a segment that Friends Provident cannot ignore.
The global takaful market is expected to grow by 15-20 per cent annually, with contributions expected to reach US$7.4 billion (RM26.5 billion) by 2015.
As at 2007, Malaysia has eight takaful operators with total assets of US$2.8 billion (RM10 billion). However, market penetration is only 7.2 per cent.
Takaful is not new to Friends Provident. It has a successful distribution partnership with Riyadh Bank in Saudi Arabia.
“That partnership (with Riyadh Bank) has turned into a good prosperous venture for both sides,” he said.
Sepe said the company intends to “throw its weight behind” AmLife and lend its strength in product development, marketing and customer service to make the venture a successful one.
“Product innovation, in general, is something we want to exploit,” he said.
Friends Provident is the market leader in the UK life and pensions business that includes life protection, income protection, pensions and investment products for individual customers and corporate clients.
The UK company is determined to turn AmLife into the biggest and most successful player in the market.
For the 12 months ended March 31 2008, AmLife or formerly AmAssurance Bhd, had its annualised new life business premiums grow by 18 per cent to RM93 million.
Friends Provident’s entry into Malaysia also expands its footprint in Asia, which is expected to contribute significantly to its overall growth in the future.
“The Asia region holds a lot of interest for us. Malaysia is what I consider to be the next logical step for us, complementing our operations in Hong Kong and Singapore. But it won’t be the final. The whole of Asia is tremendously attractive and exciting in terms of its potential,” Sepe said.
Friends Provident was founded in 1832 in the UK as a life insurance company.
It is now the third largest pension provider in the UK, with more than US$200 billion (RM718 billion) in assets under management worldwide.
Outside the UK, it operates in Hong Kong, Singapore and Dubai and provides life, investment and pension products to around 2.5 million customers.
“In 2007, new business revenue from international business increased by 50 per cent. We expect that percentage to grow. Not because we intend to slow down in the UK but because we are seeing faster growth available outside UK,” Sepe said.
Source: http://www.btimes.com.my/Current_News/BTIMES/articles/rocco/Article/index_html
