Kurnia Group
Overseas units to post strong growth
BUSINESS TIMES - Wednesday, November 25th, 2009
By Rupinder Singh
KURNIA Asia Bhd, the country’s largest general insurer, said its overseas
operations in Indonesia and Thailand will contribute between 20 to 25 per cent
to the group’s top line in the next three to five years.
“We expect the overseas units to grow at strong double digits in the
medium term,” Kurnia Asia director of corporate planning and investor
relations, James Tee, told reporters after the group’s annual general
meeting in Kuala Lumpur yesterday.
To meet its goals, plans include expanding the group’s distribution
channels via bank tie-ups as well as beefing up its agency force.
Tee said both Indonesia and Thailand have great potential for growth, with
a large population and low insurance penetration.
“We have a platform to get up to a level that is ready for the next
phase. We see a lot of potential to strengthen our business further.”
Overseas business now contributes 10 per cent, or RM85 million, to the group’s
gross premium income of RM1.05 billion for the financial year ended June 30
2009.
Kurnia Asia group chief financial officer Looi Kok Leong said while Thailand
and Indonesia are expected to be significant contributors to the group, Malaysia
will remain as a flagship business or majority contributor.
Kurnia Asia acquired PT Kurnia Insurance Indonesia in 2007 and a 25 per stake
in Kurnia Insurance Thailand Co Ltd in December last year.
The group has invested about RM43 million in both the foreign units RM17 million
in Thailand and RM26 million in Indonesia).
Looi said there is no immediate plan to raise capital for both units.
“At this juncture, I think what we have will suffice. We are mapping
out our growth plan to take the overseas units to a different level,” he
added.
He said the current capital levels are “comfortable” for the next
one or two years before it will be ramped up further once business picks up
aggressively.
Kurnia, which changed its financial year-end to December from June previously,
expects its results to be positive to reflect its first quarter results.
Kurnia recorded a profit of RM32.2 million in the fiscal first quarter ended
September 30 2009, compared with a loss of RM12.1million a year earlier.
The significant improvement was largely due to the recovery of the equity
market.
Kurnia currently has a 5 per cent exposure in the equity market, compared
with 3 per cent in June this year.