KUALA LUMPUR: Zurich Insurance Company Ltd, having completed its acquisition of Malaysian Assurance Alliance Bhd (MAA) recently, will have to dispose of MCIS Zurich Bhd as Bank Negara Malaysia (BNM) prohibits foreign companies from owning more than one insurance company.

Dan Bardin, CEO of Global Life Asia-Pacific & Middle East who oversees Zurich’s operations in the region, stressed that MCIS’ customers will not be left in the lurch if it happens. “MCIS Zurich carries our name and has done so since 2001 — 10  years. We will continue to look out for the interests of MCIS’ customers.”

Bardin also said that Zurich, at the time of acquiring MAA, had requested more time from BNM to dispose of its 40% stake in MCIS and indicated that Zurich has yet to undertake any material action.

An industry analyst pointed out, “It makes most sense for Zurich to merge the assets of MAA and MCIS and dispose of the extra licence separately. However, it may be difficult for Zurich to find a buyer for the licence in the current environment which is highly competitive.”

MCIS is relatively small in the industry, the analyst explained, “[Which is why] Zurich has acquired MAA even though it already has a licence through MCIS. Zurich needs MAA’s established network.”

Bardin earlier told The Edge Financial Daily: “I was very impressed with the level of talent here in Malaysia [MCIS]. You can have a strategy, but without a good team it will not work. It is much better to have good people first and then build a strategy with them.”

(From left) Zurich's Global Life Asia-Pacific & Middle East head of special projects Philip Smith, Malaysian Assurance Alliance Bhd (MAA) chief operating officer Daniel A Reymond, Bardin, MAA life insurance president John Leong and MAA general insurance president Sia Chon Ming at the media luncheon yesterday.

According to MCIS’ annual report for 2011, the general insurer has net assets of RM93.98 million.

“Zurich stands apart from the other insurance giants like AIA and ING because we focus on life and general insurance,” said Bardin. He pointed out that the last financial crisis had thrown insurance giants like American International Assurance (AIA) into turmoil because of their financial products while Zurich was relatively unscathed.

“Zurich has traditionally been very prudent in balancing its portfolio. We have not needed to drastically rebalance our portfolio since the global financial troubles began. That is why, while all the other big players are retreating from Asia and emerging markets we are still expanding here,” said Bardin.

In the Asia-Pacific region, Zurich has established itself in Taiwan, Hong Kong, China, Singapore, Japan, Australia and Indonesia. “We will continue to keep an eye out for opportunities to expand in the region (Asia-Pacific),” he added.

Zurich, which has its headquarters in Switzerland, is well established in Europe, the US and South America.

Bardin, who is positive about Zurich’s prospects in Malaysia, said: “I don’t have any major concerns about doing business in Malaysia. Malaysia has strong demand with a growing middle class. It is also politically stable.”


This article appeared in The Edge Financial Daily, January 11, 2012.