Aeon Credit to cultivate its insurance segment

Company hopes to make insurance a core area of its business within the next three years

Aeon Credit to cultivate its insurance segment

Insurance News

By Gabriel Olano

Aeon Credit Service Malaysia Bhd is planning to make insurance one of its core business areas within the next three years, according to its chairman.

“There is huge potential for our insurance business with our [six million] customer base from our sister companies of Aeon Co (M) Bhd, and Aeon BiG (M) Sdn Bhd, so we hope to make it one of our core segments [within three years],” Aeon chairman Datuk Abdullah Mohd Yusof told reporters after the company held an extraordinary general meeting on Wednesday.

Currently, Aeon functions as an insurance agent, selling products from several insurers, such as Prudential, Chubb, and Tokio Marine. But first, the group must build the needed infrastructure to properly grow the insurance business, Abdullah added.

For the financial year ended February 28, 2017 (FY 17), Aeon’s insurance operations brought in MYR11 million (US$2.56 million) or just 1% of its MYR1.1 billion (US$256.5 million) total revenue. The group’s main revenue generator is its personal financing business, which brings in almost a quarter of earnings, followed by motor financing, then by easy payments.

Amid challenging economic conditions, Abdullah remained optimistic that the company can maintain a double digit growth rate.  For FY 17, Aeon Credit’s revenue grew by 14.2%, while net profit rose by 16.1%.

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