KWAP EYE­ING FOR­EIGN IN­SUR­ERS?

Fund ask­ing for pitches fol­low­ing in­quiries over buy­ing stakes in the firms’ lo­cal units

New Straits Times - - Business -

KUALA LUMPUR

THE Re­tire­ment Fund Inc (KWAP), Malaysia’s sec­ond-largest pen­sion fund, is con­sid­er­ing in­vest­ing in for­eign-owned in­surance com­pa­nies.

KWAP chief ex­ec­u­tive of­fi­cer Datuk Wan Ka­maruza­man Wan Ah­mad said it was ask­ing for pitches fol­low­ing in­quiries from banks about pos­si­bly buy­ing stakes in overseas in­sur­ers’ Malaysian units.

“There’s no dead­line for the pro­pos­als,” Wan Ka­maruza­man was quoted as say­ing by Bloomberg yes­ter­day.

KWAP’s in­ter­est fol­lows re­ports that for­eign in­sur­ers must raise the pro­por­tion of lo­cal share­hold­ers in their firms to at least 30 per cent, in a bid to lift do­mes­tic par­tic­i­pa­tion in the sec­tor.

Bank Ne­gara Malaysia re­port­edly in late June sent let­ters to such wholly-owned in­sur­ers re­quest­ing their for­eign par­ents to re­duce their stakes, in line with reg­u­la­tion for in­sur­ers in­cor­po­rated do­mes­ti­cally.

In 2009, Malaysia lib­er­alised the for­eign own­er­ship rules that al­low for­eign eq­uity par­tic­i­pa­tion in in­surance com­pa­nies and taka­ful op­er­a­tors to in­crease from the 49 per cent limit to 70 per cent.

At that time, Bank Ne­gara said a higher for­eign eq­uity limit beyond

70 per cent for in­surance com­pa­nies would be con­sid­ered on a case-by-case ba­sis for play­ers that can fa­cil­i­tate con­sol­i­da­tion and ra­tio­nal­i­sa­tion of the do­mes­tic in­surance in­dus­try.

RAM Rat­ing Ser­vices Bhd re­cently said there were 11 Malaysia-in­cor­po­rated in­sur­ers that were fully-owned by for­eign firms.

Ja­pan’s Tokio Marine Hold­ings Inc, to­gether with two of the largest in­surance com­pa­nies in Malaysia, namely AIA Group Ltd and Great Eastern Hold­ings Ltd, are among the for­eign com­pa­nies that have wholly-owned gen­eral in­surance and life in­surance op­er­a­tions

lo­cally.

Bloomberg re­cently said overseas in­sur­ers, in­clud­ing Pru­den­tial Plc, were pur­su­ing plans to sell stakes in their Malaysian units in deals that could raise at least a com­bined US$2 bil­lion (RM8.56 bil­lion).

Al­lianz Malaysia Bhd and Man­ulife Hold­ings Bhd are among the for­eign in­surance com­pa­nies that are cur­rently listed on Bursa Malaysia.

Al­lianz Malaysia’s ma­jor share­holder is Al­lianz SE of Ger­many with about 66 per cent stake, while Man­ulife Hold­ings is con­trolled by Man­ulife Cen­tury Hold­ings (Nether­lands) BV with a nearly 60 per cent stake.

BLOOMBERG PIC

Great Eastern Hold­ings Ltd is among for­eign in­sur­ers that have wholly-owned gen­eral in­surance and life in­surance op­er­a­tions in Malaysia.

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