Monday January 21, 2013
Tony Fernandes' Tune hopes to buy some insurance firms in Indonesia and Thailand
By DALJIT DHESI
KUALA LUMPUR: Tune Ins Holdings Bhd, which is awaiting approval for its initial public offering (IPO) scheduled for this year, is hopeful of acquiring some insurance companies in Indonesia and Thailand before penetrating other Asean countries in its bid to expand into the region.
Chief executive officer Peter Miller said the company was in discussions with certain insurance companies there, but nothing had been firmed up at this juncture.
Describing the move to venture into the region as part of the company's growth strategy, he told StarBiz that it was confident of making its presence felt in the insurance business in these two countries, although no timeline for the acquisitions was given.
“There is a good market for insurance in the region due to its relatively strong economy and affluent population. As people get wealthier, they tend to accumulate assets and the demand for insurance increases.
“Furthermore, we can leverage on AirAsia's presence in Thailand and Indonesia that would allow us to have a competitive edge there,'' he said.
Tune Ins is a company under the Tune Group stable. The group is co-owned by AirAsia Group chief executive officer Tan Sri Tony Fernandes and his partner Datuk Kamaruddin Meranun, who are also the founders of AirAsia.
Tune Ins has an 83% stake in Tune Insurance Malaysia Bhd, formerly Oriental Capital Assurance Bhd (OCA). In May last year, Tune Ins bought the 79.8% stake in Maika Holdings Bhd general insurance arm OCA for RM156.9mil cash or RM1.96 per share.
Miller added that the company was bullish on the outlook of the insurance sector in the country and was confident of riding on the growing competition in the sector.
He attributed this to its strong general insurance business and more importantly, to the Tune Group brand, adding that the brand represented good value to customers and its agents. Tune Insurance has about 1,000 agents and 7.6 million policyholders in its database.
Besides the general insurance business, Tune Ins is also strong in online insurance, thanks to AirAsia, with reinsurance arrangements with various partners in 14 countries.
On consolidation, Miller said he expected more similar exercises happening in the industry, although Tune Ins would choose the organic path for growth.
According to its draft exposure on the Securities Commission website last year, Tune Ins registered an operating revenue of about RM30mil in 2009, RM43.5mil in 2010 and RM55.9mil in 2011, translating into a compounded annual growth rate of 36.5% from 2009 to 2011.
Some earlier reports had indicated that Tune Ins could go for an IPO as early as next month, although Miller did not commit to the timeframe for its listing on the Main Market of Bursa Malaysia.