Kurnia Group
Kurnia Asia may acquire life insurer
BUSINESS TIMES - Thursday, December 13th, 2007
By Jeeva Arulampalam
The general insurer has identified a couple of potential target companies but has yet to start negotiations with any of them, says its managing director.
GENERAL insurer, Kurnia Asia Bhd, said it wants to diversify its portfolio and possibly acquire a life insurance company to improve revenue.
Managing director and chief executive officer Datuk Adrian Loh said to own a life insurance company, Kurnia would have to acquire as Bank Negara Malaysia is not issuing new life insurance licences.
"Our search for suitable acquisition target is ongoing. We are looking for a well-managed company, who is a forefront runner in non-motor products," Loh told reporters after the company's annual general meeting in Petaling Jaya yesterday.
Loh said Kurnia has identified a couple of potential target companies but has yet to start negotiations with any of them.
He said for now, Kurnia will focus on growing its general insurance business organically, by underwriting more non-motor business.
It aims to achieve between five and eight per cent growth in gross net premium for the financial year ending June 30 2008.
Loh said the company also hopes to increase its current share of 14.5 per cent of the overall local general insurance market to 18 per cent within the next three to five years.
Kurnia is looking to increase its non-motor ratio contribution from 11 per cent to 15 per cent for its present fiscal year.
The company has taken steps to diversify its business portfolio further since its net profit for financial year 2007 dropped 96 per cent to RM1.15 million from FY06 due to depressed underwriting results impacted by the slower vehicle sales.
On overseas expansion, Loh said Kurnia was in talks to clinch deals in Indonesia and Cambodia.
"We may acquire another mid-sized general insurer in Indonesia as we are in the advanced stage of discussion," he said. Kurnia Asia made its first regional acquisition with P.T. Kurnia Insurance Indonesia earlier this year.
Loh added that they were also in talks with a potential joint-venture partner in Cambodia to set up a composite insurance company.