Malaysia’s MAA to Sell Life Insurance Unit in Indonesia

Malaysia's MAA Assurance, an insurance subsidiary of MAA Holdings Bhd., is seeking buyers for its life insurance unit in Indonesia, PT MAA Life Assurance, as it plans to withdraw from the life business in the country.

"We have received expressions of interest and have had preliminary discussions with interested parties on the disposal," said Muhamad Umar Swift, chief executive officer of MAA Assurance.

The company is looking to sell the life unit only, while it keeps the nonlife unit, PT MAA General Assurance in Indonesia.

"This forms part of MAA group's rationalization plan and allows the group to focus on its existing insurance and takaful businesses in Malaysia," said Swift.

The Malaysian insurance group operates life, nonlife and takaful, or Islam-based insurance businesses in Malaysia with total assets of 7.2 billion ringgit (US$2.2 billion) in 2009.

In Indonesia, the group's wholly owned subsidiary MAA International Assurance Ltd. acquired 98% and 83.02% stakes, respectively, in PT MAA Life Assurance and PT MAA General Assurance from PT Multi Artha Aman in 2002.

PT MAA Life Assurance offers both conventional and takaful insurance products such as traditional life, investment-linked and health for groups and individuals in Indonesia. The products are distributing through agencies, banks and brokers. The life unit's turnover premiums dropped to 102 billion rupiah (US$11 million) last year, from 200 billion rupiah and 191 billion rupiah in 2008 and 2007, respectively.

PT MAA General Assurance offers fire, motor, marine and personal lines with distribution through brokers, agents and direct channels in Indonesia. The nonlife insurer reported an increase of turnover premiums to 194 billion rupiah in 2009, from 160 billion rupiah and 134 billion rupiah in 2008 and 2007, respectively.

In 2009, MAA Assurance reported an increase of nonlife premium income to 476 million ringgit in 2009, up from 372 million ringgit in 2008. However, the group's life insurance operation saw a drop of gross premiums to 1.05 billion ringgit in 2009 from 1.20 billion ringgit in 2008, according to MAA Assurance's annual report. The group's profit before tax was 34.4 million ringgit in 2009, up from 24.6 million ringgit a year earlier.

(By Iris Lai, Hong Kong bureau manager: [email protected])