Domestic insurer welcomes competition from foreign entities

Competition is unavoidable, says executive, but regulators must ensure a level playing field

Domestic insurer welcomes competition from foreign entities

Insurance News

By Gabriel Olano

Malaysia-based insurer Etiqa has said that it welcomes the presence of foreign insurers in the market, saying competition is unavoidable and that these firms are offering healthy competition.

Maybank Ageas Holdings Bhd, the parent company of Etiqa Insurance & Takaful, said that the competitive environment between local- and foreign-owned insurers is good.

“Competition will always be there. We cannot avoid it,” Maybank Ageas CEO Kamaludin Ahmad told Free Malaysia Today.

Ahmad said that he agrees with Bank Negara Malaysia’s (BNM) plans to enforce the cap on foreign ownership of insurers in order to encourage domestic participation in the insurance sector.

Earlier, Bloomberg reported that BNM wants to enforce the foreign ownership limit of 70%, and that it will require foreign firms who exceed it to divest some of their holdings to meet the required amount.

Previously, the BNM has freely given extensions for companies that did not comply with the limit, but now the central bank might not be so lenient anymore. To allow exemptions, the firms involved must show that they have Malaysia’s best interests in mind, said the report.

BNM governor Muhammad Ibrahim issued a warning last year, saying that foreign insurers must “contribute more to justify their presence” in Malaysia’s market.

The wholly foreign-owned insurers in the market include AIA, Great Eastern, and Tokio Marine. Some of their domestic competitors are Maybank’s Etiqa and Tune Insurance, which is backed by business tycoon Tony Fernandes.

Related stories:
Malaysian central bank has no new policy on foreign ownership of insurers
Etiqa Insurance releases usage-based car policy
Millions in life insurance benefits left unclaimed

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