Bank Negara Malaysia has given out four family takaful licences, instead of two as had been announced earlier. The central bank said the decision to grant the additional licences was driven by the favourable economic conditions since the initial announcement made on April 27 last year and the growth potential of the industry in the country as well as region, reports Business Times (2 Sept 2010).
"There are tremendous growth opportunities for the insurance and takaful industry in supporting the requirements of the economy," Bank Negara said in a statement yesterday.
In a report by Jeeva Arulampalam, the newspaper noted that the new licences see several banking groups collaborating with foreign insurance partners.
AMMB Holdings Bhd teamed up with the UK's Friends Provident Group plc. Public Bank Bhd and its Public Islamic Bank Bhd formed a tripartite pact with ING Management Holdings (Malaysia) Sdn Bhd, while The Great Eastern Life Assurance Co Ltd tied up with Koperasi Angkatan Tentera Malaysia Bhd.
A joint venture between American International Assurance Bhd (70 per cent) and Alliance Bank Malaysia Bhd (30 per cent) was also granted a licence. AMMB and Friends Provident will set up a new company, tentatively known as AmTakaful Bhd. AMMB will have a 70 per cent stake, while its British partner will own the remaining 30 per cent. Both parties previously collaborated in forming AmLife Insurance Bhd, a life insurance company. With an initial capital of RM100 million, the new company is expected to begin operations in the second quarter of next year, AMMB told Bursa Malaysia yesterday.
"The approval for the family takaful licence will greatly enhance AMMB's existing Islamic finance activities and widen its insurance services to provide financial solutions across all levels of Malaysian society," it said.
ING Management will hold a 60 per cent stake in a partnership with Public Bank (20 per cent) and Public Islamic (20 per cent). The joint-venture company will have a built-up agency force of 15,000 in the long term, the companies said. Its takaful products will be promoted through tied agency, banctakaful and employee benefits, which currently exist in ING and the Public Bank group. "The family takaful company will focus on increasing takaful penetration domestically and develop Malaysia as an international Islamic financial hub," ING and Public Bank said in a joint statement. The new company is targeted to be fully operational by the first half of next year. ING and Public Bank officially began their 10-year strategic bancassurance alliance in 2008.
The collaboration between Great Eastern and Koperasi Tentera will see the former holding a 70 per cent stake. To be known as Great Eastern Takaful Sdn Bhd, the new insurer will be operational early next year. "Malaysia will function as the group's Islamic finance headquarters as we expand our takaful business beyond Malaysia's shores into the region," Great Eastern chairman Fang Ai Lian said in a statement yesterday.
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