Malaysia’s biggest insurance firm joins forces with local IT group

Malaysia’s biggest insurance group, MAA Assurance, has decided to enter into a management tie-up with businessman and IT mogul Raymond Garcia Jr., marking the group’s first major venture in the Philippines.

Citing encouraging prospects in the Philippine economy, MAA said the venture initially will position itself in the market as a leading provider of non-life insurance products and eventually go into related financial services such as banking, life insurance and mutual fund operations.

MAA chief executive officer Tunku Dato Ya’acob Bun Tunky Abdullah told reporters that the group has been considering various investment options in the Philippines over the last three to four years, evaluating different potential local partners.

According to Tunku Ya’acob, MAA’s decision to establish its presence in the Philippines was encouraged by the change in administration that, he said, gave the country a semblance of renewed political stability conducive for foreign investments.

Tunku Ya’acob said MAA has been positioning itself to enter the Philippine market which has an estimated volume of P18.43 billion in motor insurance (P6.696 billion), casualty insurance (P2.746 billion) and other insurance services worth P2.65 billion.

"MAA is doing very well in Malaysia, our reserves are very strong so this is the perfect time for us," he said. "Also as a matter of policy, the group has long decided that our regional expansion will be limited to three countries only: Indonesia, Philippines and India."

MAA, according to Tunku Ya’acob, has started operations in Jakarta and will start operations in India next year. "We are using a fairly conservative approach, we want to go where we are sure we will get the most benefits," he said.

Tunku Ya’acob, who is in the Philippines to oversee the soft launch of its venture with the Garcia Group, said MAA had decided to tie up with Paramount Insurance Corp., a dormant insurance company that was recently acquired by Garcia.

Pending the approvals from the Insurance Commission and other regulatory agencies, Paramount will be renamed MAA General Assurance Philippines (MAAGAP), a venture that will be jointly-owned by MAA and Garcia who will control 60 percent.

At present, Paramount has a paid-up capital of P25 million and this would be eventually increased to P50 million although the terms of infusion have yet to be finalized.

Tunku Ya’acob said MAA is eyeing a "comfortable market share" in the Philippines, adding that the group should be well in the top 10 non-life insurance companies in the country by 2005.

"We don’t want to be the biggest, we want to do quality business and by default that would put us in the top 10," he said.