Berjaya Sompo eyes RM1b premium by 2019
03 Oct 2018, 09:37 am
main news image

This article first appeared in The Edge Financial Daily on October 3, 2018 - October 9, 2018

KUALA LUMPUR: General insurance provider Berjaya Sompo Insurance Bhd is eyeing a double-digit growth in its gross written premium (GWP) to RM900 million this year, in line with its aim to achieve the RM1 billion mark by 2019.

It is looking to boost the figure to RM1.5 billion in five years from now, which will rank it among the top five insurers in Malaysia, according to its chief executive officer Tan Sek Kee.

Tan was speaking to reporters yesterday after the launch of the company’s new motor insurance product, Sompo Motor, together with his deputy Futoshi Hanahara and chief distribution officer Stuart Chua.

According to Tan, the company recorded a 4.9% jump in GWP to RM765 million in 2017, from RM729 million in 2016.

He said the company is banking on its 18-year bancassurance partnership with CIMB Group Holdings Bhd, whereby CIMB will distribute Sompo’s non-life insurance solutions through the bank’s distribution network, to deliver the anticipated GWP growth to RM900 million this year.

“We are now ranked eighth [in Malaysia] in terms of GWP, after the first six months of results,” said Tan, adding the company targets to reach the fifth spot by 2023. For this to happen, he said the company has to expand its market presence to command a market share of about 7%, from the 4.8% it had as at the beginning of this year.

The newly launched Sompo Motor is a comprehensive product that was borne as a result of Malaysia’s de-tariffication of the motor insurance sector, and evolving consumer needs. The motor insurance business is the largest contributor to Berjaya Sompo’s total premiums, followed by health insurance, said Tan.

“We welcome the implementation of motor de-tariffication as it enables Berjaya Sompo to compete on a level playing field. With Sompo Motor, our main focus is enhancing the base-level features and service level,” said Chua. He said the new product makes having to include common add-ons for a comprehensive private car insurance a redundant exercise, as these are already included in the basic benefits of Sompo Motor.

“By early next year, we are looking to launch a new small and medium enterprise product, to insure them against fire and personal accidents,” Tan added.

Tan also shared that inorganic growth is part of Berjaya Sompo’s plans. The company is keen to acquire peers in response to the government’s call for greater sector consolidation.

“We are constantly on the lookout for acquisition targets. We wouldn’t close the door [on an opportunity], but we’ll have to look at the timing and pricing. If there are good opportunities, it is something we will definitely look at,” Tan said.

Last Friday, Bank Negara Malaysia governor Datuk Nor Shamsiah Mohd Yunus said there is room for further consolidation in the insurance industry. “Our economy is in need of transformational change in the insurance sector — not incremental ones”, she was reported as saying at the recent Malaysian Insurance Institute Summit on “Innovation in a Disruptive Era”.

Part of Sompo Holdings (Asia) Pte Ltd, Berjaya Sompo is a partnership formed between Sompo Japan Nipponkoa Insurance Inc and Berjaya Group in 2011. Sompo Holdings currently owns a 70% stake in Berjaya Sompo, with Berjaya Capital Bhd holding the balance of 30%.

Print
Text Size
Share