The Star Malaysia Monday April 19, 2010 By DALJIT DHESI
PETALING JAYA: AXA Affin Life Insurance Bhd, a relatively new entrant in the insurance market, may venture into the lucrative takaful business in the next two years.
Chief executive officer Loke Kah Meng said for now, the company wanted to build a solid foundation for its conventional insurance and distribution channels first before considering going into Islamic insurance.
"At the moment, we want to focus on conventional business and grow our traditional life, investment-linked business and medical insurance as well as strengthen our multi-distribution channels.
"There is potential in the takaful market as currently the penetration rate is below 10% compared with over 40% in life insurance," he said during an interview.
Nonetheless, he said the life insurance penetration rate was still not that high compared with Singapore and Hong Kong and there was ample room for the life business to grow in view of the Government's New Economic Model which, among others, stressed on high per capita income and business sustainability.
AXA Affin Life, which started operations about three years ago, is a 51:49 joint venture between Affin Holdings Bhd and AXA Asia Pacific Holdings Ltd.
For the company to grow, Loke said it would need to go "back to basics" as it realised consumers were confident with companies with financial strength, market leadership and which they could trust.
As part of the AXA group, the company could share the best practices from around the world and apply them in the Malaysian market. This includes the areas of distribution, marketing, operations, products and human resource.
AXA currently has 80 million customers worldwide and manages more than one trillion euros globally. It is among the few awarded double A ratings by Standard & Poor's despite the global financial turmoil.
Loke said one way AXA Affin Life could boost market share and overall business standing in Malaysia was by banking on AXA's regional blueprint or operating model, a standardised blueprint used in the eight Asian countries which AXA has presence in.
He said this common platform would provide an avenue for quick product sharing knowledge and implementation as well as faster time for product launches and sales.
Apart from improved operations efficiency and costs, the blueprint would also enhance the ability to attract and retain talent within the group in the region.
Multi-distribution channels would be another way to enable AXA Affin Life to boost its presence in the country. Bancassurance and agency are the main distribution channels apart from direct marketing.
Loke said currently five local and foreign banks were its bancassurance partners to distribute its products. All five were strong in wealth management and consumer banking, which Loke said was a boon to the company's distribution of its products.
AXA Affin Life currently has a market share of 1.5%, the smallest among the 16 life insurers in the country.
Loke said he anticipated the company to move up "two or three notches" by the second quarter of this year.
To expand its agency force, Loke said it would look at successful agents seeking to manage their own agency or those experienced in the sale of other financial products but now looking to become life agents. The company has 400 agents and plans to expand the number to 1,200 by year-end, and 3,000 by 2012.
AXA Affin Life also aims to double its new business premiums to RM320mil by year-end from about RM160mil in 2009.
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