KUALA LUMPUR: Maybank Ageas Holdings Bhd, the operator of Etiqa insurance and takaful brands in the country, aims to expand its footprint in Indonesia and the Philippines by acquiring a “small and inexpensive player” — one each in the respective countries — as early as next year.

“We are in talks with a few parties to expand our business in the regional market. Obtaining the insurance licence in those countries is quite difficult. Therefore, through our acquisitions, we can leverage on their existing licence to operate there,” Maybank Ageas chief executive officer Kamaludin Ahmad told reporters yesterday.

As for the target companies, Kamaludin said Maybank Ageas is looking at those with lower valuations, but with robust business operations and distribution channel.

 “Valuation-wise, we are considering between three and five times of the book value. To us, that is quite fair. But, of course, it must also be sensible,” he said.

Etiqa made its first regional foray into Singapore last year via Etiqa Insurance Pte Ltd, providing both general and life insurance products.

Kamaludin, who was speaking to reporters after presenting Maybank Ageas’ financial results for the year ended Dec 31, 2014 (FY14), also quashed market talk that Maybank Ageas plans to list Etiqa on the local bourse soon.

“Let me put the matter to rest. Yes, we are always open to every possible option that will bring us to the next level. But no, we will not be eyeing to list Etiqa anytime soon. Our hands are tied with business enhancement and regional expansion plans,” he said.

“Investors have been tirelessly asking the same [listing] question time and again. But our answer is that the listing of Etiqa — if it happens — must be done with proper valuation and at the right time. Unfortunately, now is not the time,” he said.

Kamaludin, however, hinted that Etiqa, if it was listed, could be valued between RM7 billion and RM9 billion, based on the assumption of a 15 times price-earnings ratio and current net profit that hovers at RM550 million.

In FY14, Maybank Ageas reported a record consolidated pre-tax profit of RM767 million, up 5% from RM733 million in FY13, driven by a combined gross written premium and contributions that grew by 5% to RM5.02 billion from RM4.78 billion previously.

“Our net profit in FY14 dipped 7% to RM542.16 million from RM580.46 million in FY13 due to tax adjustments. [But] I must warn you that assessing on net profit alone could [be] misleading on the overall performance. Excluding tax adjustments, our performance is robust and on a steady growth trajectory,” said Maybank Ageas chief financial officer Loke Hoe San, adding that it contributed 8.1% as a share of pre-tax profit to its parent Malayan Banking Bhd (Maybank) in FY14.

Maybank has an effective interest of 69.05% in Maybank Ageas, while the remaining 30.95% is held by Belgium-based Ageas Insurance International NV.

This year, Kamaluddin expects both the group’s insurance and takaful business to chalk up growth of between 10% and 12% in gross written premium, as it focuses on profitable classes and regular premium business.

Etiqa is currently the leading general insurance and takaful player in the country, with a market share of 12.8%. Currently, it has 3.9 million unique customers and 4.8 million in policies and certificates.

“Our takaful business remains the top player in the industry, commanding a market share of 47.3% in general takaful and 20.5% in family takaful, measured by growth in new business,” Kamaludin added.

This article first appeared in The Edge Financial Daily, on April 30, 2015.