By KEVIN WONG / Pic By ISMAIL CHE RUS
Berjaya Sompo Insurance Bhd has not dismissed the possibility of acquiring other insurance companies as the firm seeks to claim a larger stake in a very congested Malaysian market.
CEO Tan Sek Kee said Berjaya Sompo is always on the lookout for potential acquisition targets.
“We wouldn’t close the door on an opportunity. But, we will have to look at the timing and pricing. And if there are good opportunities, it is something we will definitely look at,” he said in Kuala Lumpur yesterday.
Recently, Bank Negara Malaysia governor Datuk Nor Shamsiah Yunus had called for further consolidation in the insurance sector.
“Our economy is in need of transformation in the insurance sector, but not incremental ones,” she said during the recent Malaysian Insurance Institute Summit on “Innovation in a Disruptive Era”.
Consolidation in the insurance sector is critical as the sector has been dogged by the existence of too many providers, product redundancies and snail’s pace growth. Many of the service providers also do not have the economy of scale to be efficient.
Berjaya Sompo is already aiming to become among the top five general insurance (GI) providers in the country by 2023, said Tan.
The general insurance provider is ranked eighth in terms of gross written premiums based on the first half of this year’s performance.
He said the insurance provider needs to have a market share of between 6% and 7% to be among the top five GI providers by 2023.
“Currently, Berjaya Sompo’s market share stands at about 4%. It is not going to be very straightforward to gain market share as we are in a detariff market, where the premium is going down,” he said.
The GI provider is focused on growing its written premium to RM1 billion by 2019, from RM765 million recorded last year.
“We are optimistic to reach this target as we have recently signed an 18-year partnership with CIMB,” Tan said.
Under the partnership between CIMB Bank Bhd and Berjaya Sompo, CIMB will market and distribute non-life insurance solutions through its various channels.
Meanwhile on digitalisation, Berjaya Sompo has invested about RM4 million in automation, especially in carrying out monotonous tasks like data entry.
Tan said efforts to apply greater digitalisation would not reduce job opportunities as the company is employing more people to perform tasks, which require higher skills and mental ability.
“We want our people to perform jobs that are more valueadded, like data analysis or coming out with new products,” he said.
The company is also currently building a mobile application which will allow customers to purchase Berjaya Sompo’s products easier. The app is expected to be launched early next year.