The Star Malaysia Wednesday March 10, 2010 BY DALJIT DHESI
PETALING JAYA: The proposed sale of American International Group Inc's (AIG) crown jewel, American International Assurance (AIA), to Prudential Plc will not have an immediate impact on Prudential's operations in Malaysia.
"The (proposed) takeover of AIA will, at the moment, have zero impact on our operations here and business is as usual for now," said Prudential Assurance Malaysia Bhd (PAMB) CEO Charlie E. Oropeza in an interview with StarBiz. "As for board changes in the company, I myself don't have a firm grasp on the changes that will happen at this stage as it is still to early to tell."
An observer with close ties to the company said it was stilll too early to talk at this stage on integration plans, adding that the acquisition would not focus on any cost-cutting measures but on growth strategy as the aim was to have a bigger market in Malaysia.
According to Oropeza, the company's 12-month goals and strategic plans would stay put despite the proposed acquisition of AIA.
He said the recent visit to Malaysia by Prudential Plc's group chief executive Tidjane Thiam and Prudential Corp Asia chief executive Barry Stowe further underscored the need for PAMB to work harder on implementing and executing plans to strengthen its business.
"He (Thiam), since his appointment on Oct 1 last year, has visited Malaysia four times as he firmly believe Malaysia is a good market for the group. The (proposed) acquisition will also see Prudential and AIA maintaining their brands and keeping their businesses and brands separate, but consumers can expect stronger and broader product range,'' Oropeza said.
AIG agreed to sell its Asian life insurance unit, AIA, to Britain's Prudential Plc last Monday for US$35.5bil in the largest insurance deal ever, paving the way for Prudential to become South-East Asia's biggest insurer.
AIA currently serves more than 20 million customers in Asia whereas Prudential has more than 11 million life insurance customers in the region, according to news reports.
Meanwhile, PAMB yesterday unveiled its latest results - a record performance that saw a 24% increase in new business sales amid challenging market conditions.
The insurer posted new business annual premium equivalent of RM817mil for the financial year ended Dec 31, 2009, compared with RM659mil registered in the same period in 2008. Its fourth-quarter (2009) performance was equally good with a significant 69% increase in new business premiums compared to the same quarter in 2008, according to Oropeza.
He attributed the strong performance to the strength of the company's agency and non-agency distribution channels, its commitment to provide innovative products to meet customer's needs coupled with the strong Prudential brand name and continued product innovation .
One of such innovation include PRUhealth, a revolutionary medical insurance plan that rewards healthy policyholders with an annual No Claims Bonus.
Oropeza said the company's systematic implementation of sales and marketing efforts to improve agency activity, which includes promoting the use of innovative point-of-sales tool amongst agents, had helped increase the average productivity of its wealth planners and agents from RM67,000 in 2008 to RM69,000 in 2009.
PAMB currently has an agency network of more than 11,000, of which 3,800 are bumiputra agents.
It recently opened two new branches in Kajang and Skudai, Johor, bringing the company's total branches to 41 nationwide.
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