Interview with Etiqa
Etiqa, the insurance and takaful arm of Maybank Group, is the biggest takaful player and the second largest overall insurer in Malaysia. In 2011, Etiqa Takaful became the first takaful company in the world to surpass RM2 billion in contributions, and Etiqa Insurance became the highest rated direct insurance company in Malaysia after being rated ‘A’ by Fitch Ratings.
By 2015, Etiqa group aspires to be the undisputed leader in Malaysia and an emerging player in the regional insurance and takaful industry. Inside Investor talks to Hans De Cuyper, Etiqa’s Chief Executive Officer, on his strategies of achieving this goal.
Q: Etiqa is on a very successful path, having a dominant position in takaful and growing impressively in the conventional insurance business. What is the driving force for this growth?
A: I firmly believe that the success of Etiqa is built by all Etiqans and our distribution partners. There is a strong ‘drive to perform’ and ‘energy to change’, present within all of them. Humanising our products and services is not a management project; it is in the heart and mind of our employees. The company also benefits from a good blend of management expertise. We have managers who have a strong understanding of the local corporate culture in sales and distribution, combined with managers who contribute their international expertise into our business. We aim to make the experience easier for our clients by being clear and transparent. Our concept of humanising insurance and takaful and our brand attributes – performance with conscience; hand-in-hand; rock solid; and crystal clear – make up the unique character of our brand, making us different from other brands in the industry. Moreover, Etiqa is the only direct insurance company to achieve ‘A’ Insurer Financial strength, rated by Fitch Ratings. This rating reflects EIB’s strong business profile in the domestic life and general insurance market, its extensive distribution capacity, consistent opera ting performance, sound underwriting quality and prudent investment approach. The rating also acknowledges EIB’s solid capital position and strong shareholders’ support. We have the widest distribution footprint and the most diversified portfolio in the industry with a network of 21,000 agents, 33 insurance and Takaful branches and over 400 Maybank branches as well as third party bank partners.
Q: What is the structure of your distribution network?
A: We offer a unique and personalised brand of services across all types and classes of life and general conventional insurance, as well as family and general takaful plans through a multi-channel distribution network including agency, bancassurance, bokers and direct distribution. Our wide range of life and family products include endowment, term, personal accident, education, investment-linked and medical insurance while the general conventional insurance and takaful range includes fire, motor, aviation, marine and engineering policies. As a true multi-channel distributor, Etiqa features a strong agency force comprising over 21,000 agents, 33 Etiqa branches located throughout Malaysia, plus a wide bancassurance and bancatakaful distribution network, with more than 400 Maybank branches and agreements with professional third-party banks. Etiqa is also one of the pioneers for direct sales through the internet with online Motor Takaful and Maybank2U. Cooperatives, brokers, institutions and online banking services provide added accessibility and convenience to our customers.
Q: Could you provide the latest financial figures?
A: For the six months financial period ended on December 31, 2011, the combined gross premium and contribution posted 20.2 per cent growth over the year from RM1.929 billion to RM2.319 billion, attributed by a steady increase in both life insurance/family takaful and general insurance/takaful businesses. Etiqa also registered 16 per cent growth in profit before tax, soaring to RM272 million from RM235 million as a result of improved performance from the life insurance/family takaful fund. Total assets grew 4 per cent to RM25.7 billion from RM24.8 billion. The life/family business grew 21 per cent, contributed mainly by single premium investment from the bancassurance channel and group term fife from the enterprise and corporate channel. For general insurance/takaful, the surge in motor business from all channels and marine/aviation/transit from enterprise/corporate resulted in the general business growing 20 per cent compared to same period previous year.
Q: What are the projections for the running year?
A: Looking ahead, Etiqa aspires to become the undisputed leader in Malaysia and an emerging regional player by 2015. Etiqa wants to grow and become a solid third pillar for the Maybank Group by contributing sizable revenue and higher profits. Etiqa will leverage on the group’s strength and build a wider distribution footprint for its products and services as well as looking at alternative distribution channels e.g. Maybank2U, www.motortakaful.com, etc. as a viable channel of growth.
Q: What kind of segments are you focusing on?
A: The major benefit of Etiqa is that we are in all the markets related to our industry. This means we are in the life insurance and the general insurance. We are also in insurance as well as in takaful, and we are servicing the retail market up to the corporate market. We underwrite small general insurance like travel insurance, but we also underwrite big business such as the airlines, oil and gas businesses, and the marine, aviation and transport risks. On the life side, we are strong players in the individual market. We also have a leading position in employee benefits and medical. In the Malaysian market, Etiqa is actually the only company with such a wide business mix. This gives us stable growth as well as stable profitability.
Q: Etiqa has been rated ‘A’ by international rating agency Fitch. Why did you go for this rating?
A: The rating reflects the consistent performance of Etiqa backed by sound underwriting and a prudent investment approach. What is more impressive is the fact that the Etiqa brand has only been in the market since November 2007. This rating will also reinforce customer confidence in Etiqa, especially with our corporate clients. It will further strengthen Etiqa’s competitive position in this segment, covering large risks ranging from national landmarks and buildings to airplanes and oil rigs. I believe there are many companies out there with large risk exposures, who would prefer to deal with a company that is rated ‘A’ as it reflects the stability of the company, the capacity of the company to cover the risk, and the capability to provide the best reinsurance covers to its clients. Being a member of the Maybank Group has also benefited us tremendously as we can leverage on Maybank’s corporate client base to introduce our risk solutions. The ‘A’ rating by Fitch will also bolster our image in the retail market and boost the confidence of our agents. This will be an extra advantage in times where more and more foreign insurance groups are reviewing their presence in Malaysia due to the economic uncertainty at home. Etiqa is a home grown Malaysian leader, backed by solid shareholders, Maybank and Ageas. We are a safe haven for our agents to develop their business.
Q: How does Etiqa distinguish itself from the rest? What is your unique selling proposition?
A: Etiqa is about people, we put people over policies. Caring about people is vital for our business sustainability. We break down boundaries and we aim to change the face of the industry, to make life easier yet tangibly richer for everyone. We offer products and services that creatively answer respective needs yet simple to understand and clearly transparent to our customers. At Etiqa, we work hand-in-hand with our partners and customers to humanize insurance and takaful which is also in line with Maybank’s aspiration of humanising financial services across Asia. Our passion is backed by the strength, expertise and the rock solid foundation of the nation’s top financial institution and driven by the professionalism, empathy, courage and integrity of our people. Maybank and Etiqa are two exciting organisations. Born and grown in Malaysia, the group embarked on a massive transformation towards a customer centric organisation that can face the new competitive environment. For instance, our call centre has won two service awards over the last two years. And this is not common in the financial industry, where we compete with top performing call centers from other industries, like telecom and courier services.
Q: Where do you want to expand in the future?
A: For Etiqa, we have two major export products in our organisation. One is, of course, the takaful expertise. We can claim that we are one of the leading organisations in the ‘art’ of takaful. Takaful is a young industry, so the principles of takaful are still emerging and growing together with the development of the industry. Our takaful expertise is definitely an added value for countries with a significant Muslim population. The second aspect of our business, specifically in the Malaysian market, is that we are a leading bancassurance company. Approximately 50 per cent of our business is distributed through Maybank, the leading Malaysian bank. This makes us one of the leading bancassurance experts in the region. At this juncture, we are exploring for opportunities to venture into countries with high growth potential where Maybank – in 19 countries – is present. The low penetration rate in emerging Asia can further unlock enormous opportunities for Etiqa to grow by lending our expertise to countries where we place our footprint.
Q: Only in the region?
A: At this point of time, we will primarily focus on the Asean region and support the aspiration of Maybank group.
Q: There has been a noticeable increase of Takaful players in Malaysia lately. What does this mean for the competitive environment?
A: A few weeks ago, Etiqa won three international takaful awards on the World Takaful Summit in London. I was impressed by the strong brand recognition of Etiqa Takaful worldwide. With more than 40 per cent market share in Malaysia, Etiqa Takaful has gained a respectable position on the world scene. The new Takaful players will further enhance the development of the takaful industry in Malaysia, in particular to penetrate the untapped areas of business as well as contribute towards reinforcing Malaysia’s position as an international Islamic financial hub. Moreover, the new entrants will most likely bring along new technologies, high standards of service and more innovative products into the market. Etiqa welcomes the new players as we strongly believe that we still have what it takes to be number one. Etiqa Takaful has built its own niche market and a strong takaful agency force of over 14,000 agents to serve its participants. Despite a competitive environment, Etiqa, as one of the biggest takaful operators in the world, supported by our wide distribution footprint and diversified portfolio, we are confident that we can achieve our aspiration to sustain as a true champion of takaful.
[caption id="attachment_3967" align="alignleft" width="167"] Hans De Cuyper, Chief Executive Officer of Etiqa[/caption] Etiqa, the insurance and takaful arm of Maybank Group, is the biggest takaful player and the second largest overall insurer in Malaysia. In 2011, Etiqa Takaful became the first takaful company in the world to surpass RM2 billion in contributions, and Etiqa Insurance became the highest rated direct insurance company in Malaysia after being rated ‘A’ by Fitch Ratings. By 2015, Etiqa group aspires to be the undisputed leader in Malaysia and an emerging player in the regional insurance and takaful industry. Inside Investor talks to Hans De...
Etiqa, the insurance and takaful arm of Maybank Group, is the biggest takaful player and the second largest overall insurer in Malaysia. In 2011, Etiqa Takaful became the first takaful company in the world to surpass RM2 billion in contributions, and Etiqa Insurance became the highest rated direct insurance company in Malaysia after being rated ‘A’ by Fitch Ratings.
By 2015, Etiqa group aspires to be the undisputed leader in Malaysia and an emerging player in the regional insurance and takaful industry. Inside Investor talks to Hans De Cuyper, Etiqa’s Chief Executive Officer, on his strategies of achieving this goal.
Q: Etiqa is on a very successful path, having a dominant position in takaful and growing impressively in the conventional insurance business. What is the driving force for this growth?
A: I firmly believe that the success of Etiqa is built by all Etiqans and our distribution partners. There is a strong ‘drive to perform’ and ‘energy to change’, present within all of them. Humanising our products and services is not a management project; it is in the heart and mind of our employees. The company also benefits from a good blend of management expertise. We have managers who have a strong understanding of the local corporate culture in sales and distribution, combined with managers who contribute their international expertise into our business. We aim to make the experience easier for our clients by being clear and transparent. Our concept of humanising insurance and takaful and our brand attributes – performance with conscience; hand-in-hand; rock solid; and crystal clear – make up the unique character of our brand, making us different from other brands in the industry. Moreover, Etiqa is the only direct insurance company to achieve ‘A’ Insurer Financial strength, rated by Fitch Ratings. This rating reflects EIB’s strong business profile in the domestic life and general insurance market, its extensive distribution capacity, consistent opera ting performance, sound underwriting quality and prudent investment approach. The rating also acknowledges EIB’s solid capital position and strong shareholders’ support. We have the widest distribution footprint and the most diversified portfolio in the industry with a network of 21,000 agents, 33 insurance and Takaful branches and over 400 Maybank branches as well as third party bank partners.
Q: What is the structure of your distribution network?
A: We offer a unique and personalised brand of services across all types and classes of life and general conventional insurance, as well as family and general takaful plans through a multi-channel distribution network including agency, bancassurance, bokers and direct distribution. Our wide range of life and family products include endowment, term, personal accident, education, investment-linked and medical insurance while the general conventional insurance and takaful range includes fire, motor, aviation, marine and engineering policies. As a true multi-channel distributor, Etiqa features a strong agency force comprising over 21,000 agents, 33 Etiqa branches located throughout Malaysia, plus a wide bancassurance and bancatakaful distribution network, with more than 400 Maybank branches and agreements with professional third-party banks. Etiqa is also one of the pioneers for direct sales through the internet with online Motor Takaful and Maybank2U. Cooperatives, brokers, institutions and online banking services provide added accessibility and convenience to our customers.
Q: Could you provide the latest financial figures?
A: For the six months financial period ended on December 31, 2011, the combined gross premium and contribution posted 20.2 per cent growth over the year from RM1.929 billion to RM2.319 billion, attributed by a steady increase in both life insurance/family takaful and general insurance/takaful businesses. Etiqa also registered 16 per cent growth in profit before tax, soaring to RM272 million from RM235 million as a result of improved performance from the life insurance/family takaful fund. Total assets grew 4 per cent to RM25.7 billion from RM24.8 billion. The life/family business grew 21 per cent, contributed mainly by single premium investment from the bancassurance channel and group term fife from the enterprise and corporate channel. For general insurance/takaful, the surge in motor business from all channels and marine/aviation/transit from enterprise/corporate resulted in the general business growing 20 per cent compared to same period previous year.
Q: What are the projections for the running year?
A: Looking ahead, Etiqa aspires to become the undisputed leader in Malaysia and an emerging regional player by 2015. Etiqa wants to grow and become a solid third pillar for the Maybank Group by contributing sizable revenue and higher profits. Etiqa will leverage on the group’s strength and build a wider distribution footprint for its products and services as well as looking at alternative distribution channels e.g. Maybank2U, www.motortakaful.com, etc. as a viable channel of growth.
Q: What kind of segments are you focusing on?
A: The major benefit of Etiqa is that we are in all the markets related to our industry. This means we are in the life insurance and the general insurance. We are also in insurance as well as in takaful, and we are servicing the retail market up to the corporate market. We underwrite small general insurance like travel insurance, but we also underwrite big business such as the airlines, oil and gas businesses, and the marine, aviation and transport risks. On the life side, we are strong players in the individual market. We also have a leading position in employee benefits and medical. In the Malaysian market, Etiqa is actually the only company with such a wide business mix. This gives us stable growth as well as stable profitability.
Q: Etiqa has been rated ‘A’ by international rating agency Fitch. Why did you go for this rating?
A: The rating reflects the consistent performance of Etiqa backed by sound underwriting and a prudent investment approach. What is more impressive is the fact that the Etiqa brand has only been in the market since November 2007. This rating will also reinforce customer confidence in Etiqa, especially with our corporate clients. It will further strengthen Etiqa’s competitive position in this segment, covering large risks ranging from national landmarks and buildings to airplanes and oil rigs. I believe there are many companies out there with large risk exposures, who would prefer to deal with a company that is rated ‘A’ as it reflects the stability of the company, the capacity of the company to cover the risk, and the capability to provide the best reinsurance covers to its clients. Being a member of the Maybank Group has also benefited us tremendously as we can leverage on Maybank’s corporate client base to introduce our risk solutions. The ‘A’ rating by Fitch will also bolster our image in the retail market and boost the confidence of our agents. This will be an extra advantage in times where more and more foreign insurance groups are reviewing their presence in Malaysia due to the economic uncertainty at home. Etiqa is a home grown Malaysian leader, backed by solid shareholders, Maybank and Ageas. We are a safe haven for our agents to develop their business.
Q: How does Etiqa distinguish itself from the rest? What is your unique selling proposition?
A: Etiqa is about people, we put people over policies. Caring about people is vital for our business sustainability. We break down boundaries and we aim to change the face of the industry, to make life easier yet tangibly richer for everyone. We offer products and services that creatively answer respective needs yet simple to understand and clearly transparent to our customers. At Etiqa, we work hand-in-hand with our partners and customers to humanize insurance and takaful which is also in line with Maybank’s aspiration of humanising financial services across Asia. Our passion is backed by the strength, expertise and the rock solid foundation of the nation’s top financial institution and driven by the professionalism, empathy, courage and integrity of our people. Maybank and Etiqa are two exciting organisations. Born and grown in Malaysia, the group embarked on a massive transformation towards a customer centric organisation that can face the new competitive environment. For instance, our call centre has won two service awards over the last two years. And this is not common in the financial industry, where we compete with top performing call centers from other industries, like telecom and courier services.
Q: Where do you want to expand in the future?
A: For Etiqa, we have two major export products in our organisation. One is, of course, the takaful expertise. We can claim that we are one of the leading organisations in the ‘art’ of takaful. Takaful is a young industry, so the principles of takaful are still emerging and growing together with the development of the industry. Our takaful expertise is definitely an added value for countries with a significant Muslim population. The second aspect of our business, specifically in the Malaysian market, is that we are a leading bancassurance company. Approximately 50 per cent of our business is distributed through Maybank, the leading Malaysian bank. This makes us one of the leading bancassurance experts in the region. At this juncture, we are exploring for opportunities to venture into countries with high growth potential where Maybank – in 19 countries – is present. The low penetration rate in emerging Asia can further unlock enormous opportunities for Etiqa to grow by lending our expertise to countries where we place our footprint.
Q: Only in the region?
A: At this point of time, we will primarily focus on the Asean region and support the aspiration of Maybank group.
Q: There has been a noticeable increase of Takaful players in Malaysia lately. What does this mean for the competitive environment?
A: A few weeks ago, Etiqa won three international takaful awards on the World Takaful Summit in London. I was impressed by the strong brand recognition of Etiqa Takaful worldwide. With more than 40 per cent market share in Malaysia, Etiqa Takaful has gained a respectable position on the world scene. The new Takaful players will further enhance the development of the takaful industry in Malaysia, in particular to penetrate the untapped areas of business as well as contribute towards reinforcing Malaysia’s position as an international Islamic financial hub. Moreover, the new entrants will most likely bring along new technologies, high standards of service and more innovative products into the market. Etiqa welcomes the new players as we strongly believe that we still have what it takes to be number one. Etiqa Takaful has built its own niche market and a strong takaful agency force of over 14,000 agents to serve its participants. Despite a competitive environment, Etiqa, as one of the biggest takaful operators in the world, supported by our wide distribution footprint and diversified portfolio, we are confident that we can achieve our aspiration to sustain as a true champion of takaful.
