At the beginning of the year, when we decided
to relinquish our life business, the company realised that organic growth
itself would not be sufficient to ensure the company's success moving
forward. We needed to multiply our business rapidly to achieve our goal
of becoming a top 10 insurer in Malaysia.
“Tahan, therefore, made concerted efforts to establish key strategic
business alliances with several organisations to capture specific niche
markets that will allow us to have a competitive advantage over other
established players in the industry,'' he said in an interview.
The company believes these alliances would help Tahan achieve economies
of scale, without incurring high acquisition costs to broaden its network.
Tahan, Izzuddin said, had tied up with three organisations that would
help the company distribute its products to their employees and members.
They are Yayasan Guru Malaysia Bhd (YGMB), the Congress of Union of Employees
in Public and Civil Services (Cuepacs) and Pos Malaysia Bhd.
Izzuddin Tajudin
With over 141,000 registered members at present, which are expected to
double in the next few years, YGMB is set to offer tremendous business
potential to Tahan, he noted.
“More than half or 52.4% of YGMB's members are clustered in the
northern region and in the east coast corridor. Tahan has eight branches
or 42% of its total nationwide branch network in those areas and have
the technology and support infrastructure to manage this new business
segment which will help boost our business,” he said.
According to the Public Services Department, as at end-December 2004
Cuepacs held direct affiliation with 125 trade unions with estimated cumulative
individual membership of 250,000 or 23% out of the 1.1 million total civil
servants in Malaysia.
Izzuddin said Tahan was part of a consortium led by a health service
provider Mayflax Sdn Bhd to provide Cuepacs with comprehensive medical
and financial insurance.
Pos Malaysia is the latest company that has formed a strategic alliance
with Tahan to distribute its motor products.
Pos Malaysia, as a registered corporate agent of Tahan, has 650 post
offices across the country, of which 506 are directly linked to the Road
Transport Department.
Tahan began operations on a pilot basis with Pos Malaysia on Aug 18,
covering five states with 180 post offices.
The five are Kuala Lumpur, Selangor, Perak, Johor and Penang. Izzuddin
said the company would go nationwide within the next two months and would
explore using Pos Malaysia's channel to sell non-motor products.
In the next one year, the company would be focusing on three classes
of insurance: marine cargo, health and surgical, and foreign workers insurance.
On marine cargo insurance, Tahan is targeting about a 10% market share
in the next one to two years (in terms of gross premium) and views this
segment as having good potential growth in line with the increasingly
globalised and competitive business environment.
The company recently tied up with Dagang Net to jointly develop the e-Marine
Cargo portal which allows users to interact and conclude marine cargo
transactions more efficiently. Targeted customers for the system, among
others, are insurance brokers, importers and exporters.
On the provision of health and surgical insurance, he said Tahan had
formed collaborative alliances with healthcare organisation Mayflax Sdn
Bhd as well as with Pharmaniaga and Medi Screen in which the company would
underwrite claims.
Tahan has also been included under the approved panel of insurers for
the provision of the foreign workers insurance by the Government.
According to Izzuddin, the company has signed a memorandum of understanding
with Asosiasi Perusahaan Jasa Tenaga Kerja Indonesia to develop this class
of business.
Tahan recently has also inked an agreement with Indonesia-based Cosmos
Capital Group Ltd to explore business opportunities in Indonesia, Nepal
and Pakistan.
“We have already established relationships with local agencies
to expand into this area of business in these countries,” he said.
At present, motor business accounts for about 65% of the company’s
total gross premium.
By 2008, the motor to non-motor business ratio is expected to shift from
the existing 65:35 to 49:51. For ICT investment, he said Tahan had allocated
RM12mil over the next three years to further enhance its ICT initiatives.
A three-year ICT plan is in progress to support new business growth.
The plan would enhance and improve internal business processes, allowing
access to new target markets and distribution channels, better research
and development capabilities as well as more efficient and effective customer
relationship management.
Asked on the latest development of Tahan’s divestment exercise,
Izzuddin said: “We are on track and expect to complete the transfer
of the life business by year-end. We expect to be paid in full by end-March
next year.
“The proceeds of the sale will be used, among others, to develop
and promote new products, develop a more dynamic agency network and increase
distribution channels.”
Tahan early this year signed a term sheet for the business transfer agreement
with Affin Holdings Bhd and AXA Asia Pacific Holdings Ltd for the proposed
divestment of Tahan’s life business.
The life business would be eventually operated on a joint-venture basis
between Affin Holdings and AXA.
|
