Thursday, November 19, 2009

Takaful Malaysia to restructure Indonesian ops

By Alfean Hardy
Syarikat Takaful Malaysia Bhd (Takaful Malaysia), which has a general and family takaful presence in Indonesia, is looking to revamp its operations there into a leaner, fitter entity that could best be used to penetrate further into the takaful market in that country, its group managing director Datuk Mohamed Hassan Kamil said.
As of its financial year ended June 30, 2009 (FY09), the Islamic insurance firm holds a 56% stake in holding company PT Syarikat Takaful Indonesia, which in turn holds a 57.42% stake in PT Asuransi Takaful Keluarga and a 52.67% stake in PT Asuransi Umum that between them have more than 30 branches in Indonesia.
The company recently injected RM21 million directly into Ansuransi Takaful Keluarga, which meant it also has a stake in the life insurance operations of Syarikat Takaful Indonesia.
The Indonesian operations contributed about RM6.76 million in FY09.

Speaking to reporters after Takaful Malaysia's AGM in Kuala Lumpur yesterday, Mohamed Hassan said, "We're looking to restructure the holding company in Indonesia. We're in the midst of discussing with our other shareholders as to how we can make the structure leaner without having a holding company structure.
"We will still maintain a majority holding in the operating company because these are the money-generating companies," he added.
Mohamed Hassan said that, with the new strucuture in place, there would be some interest by other parties and Takaful Malaysia was looking to partner with local Indonesian banks that would be interested to take up equities in our takaful companies.
"We are looking and will be talking to local banks there," he said. "If I have a bank as a partner, I can leverage on their branches and distribute my products. That would be the most efficient way to reach out to all parts of Indonesia because setting up branches all across Indonesia can be quite costly due to the geographic spread of that country," he said.

The potential in Indonesia, Mohamed Hassan said, was something that Takaful Malaysia could not ignore.
"We believe that the current leader of the country will be able to grow the country rapidlly and economically forward. As a result, we feel that it's a country that we can't afford to ignore in terms of its potential for business," he added.
Mohamed Hassan said the other shareholders in the Indonesia operations had first right of refusal to take up any new shares or capital that it needed to raise there.
"We have about 12 different entities or individuals who hold shares and they will have preference, depending on their current shareholding amount," he said.
He said negotiations with the various shareholders was expected to begin by yearend and that Takaful Malaysia targeted to complete the exercise over the next 12 months.

(This story appeared in The Malaysian Reserve on Nov 13, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)

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