Malayan Banking Bhd (Maybank) expects its insurance and takaful arm Etiqa Group Insurance & Takaful (Etiqa) to attract more investors as interest rates in the country hikes up.
“Insurance portfolio become attractive as interest rates increases. Insurance and takaful are usually a long term business and an increasing rate environment is going to be good for the long-term earnings power and return of equity generation for the insurer,” group president and chief executive officer Datuk Abdul Farid Alias said at its recently held annual general meeting (AGM) here.
When asked, Abdul Farid said that the group is not looking at taking Etiqa public anytime soon.
“We are not planning to do anything now but we will be more aggressive in our offerings going forward as Etiqa plays a big part of Maybank2020’s strategic objectives. We believe that the improved economic outlook for 2018 will remain the backbone of Etiqa’s continued growth,” he said.
“For 2018, we will be introducing new value-added products and widening our footprint in ASEAN. Among the products we will launch include investment linked products, which will benefit if the equity market and the ringgit strengthens in 2018.”
He stressed that insurance and takaful business play a big part in the Maybank Group overall business.
“For the first time ever we saw Etiqa hitting record topline and profit before tax (PBT) of RM6.19 billion and RM1.01 billion respectively in 2017,” he said at press conference following the AGM.
“We also saw strong growth in bancassurance business of over 23.8 per cent year-on-year. As of December 2017, we also saw Etiqa becoming a premier online insurer in Malaysia with over 70 per cent market share.”
Etiqa is currently present in Malaysia, Singapore (via Etiqa International Pte Ltd), the Philippines (via AsianLife and General Assurance) and starting 2017, Indonesia (via PT Asuransi Asoka Mas).
Bank Negara Malaysia has set the target for life insurance and family takaful industry is to achieve a penetration rate of 75 penetration of the Malaysian population by 2020.
Within this, the takaful industry has set a 25 per cent penetration target, also to be achieved by 2020.