KWAP EYEING FOREIGN INSURERS?
Fund asking for pitches following inquiries over buying stakes in the firms’ local units
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.