‘New’ insurer AXA Affin eyes top five position

KUALA LUMPUR: After taking over BH Insurance (M) Bhd, the enlarged entity of AXA Affin General Insurance Bhd hopes to be among the top five insurers in the country by 2012.

AXA Affin, a joint-venture company between Affin Holdings Bhd and France-based AXA SA, has signed an agreement to buy over BH Insurance from Boustead Holdings Bhd and Felda Marketing Services Sdn Bhd.

Boustead Holdings and Felda Marketing hold 80% and 20% stake in BH Insurance respectively.

Affin Holdings chairman Gen (R) Tan Sri Mohd Zahidi Zainuddin said the merger of the two insurance companies was to strengthen the business and it was also in line with the group’s decision to streamline its insurance operations.

“The enlarged AXA Affin entity augurs well with the current economic development of the country,” he told reporters after the signing ceremony of the sales and purchase agreement yesterday.

AXA Asia General Insurance chief executive officer Jan van den Berg said the “new” AXA Affin aimed to be among the top five insurers in the country as soon as possible.

“Currently, the merged entity of AXA Affin and BH Insurance is in sixth place with a 6% market share.

“There are two major ways to grow the insurance business, namely via innovative products and the use of advanced technology, to reach a larger customer base and both (ways) exist in AXA Affin and BH Insurance,” he said, adding that the combined gross written premium value of the companies stood at RM655mil.

He said the different market segments covered by both insurers would also complement each other under one company.

“AXA Affin is more inclined towards retail while BH Insurance has stronger commercial business clients.”

Meanwhile, Boustead Holdings – which will gain RM363mil from the disposal of its stake in AXA Affin – will use the proceeds to further reduce its gearing to between 0.8% and 0.7% this year from just below 1% currently.

Felda Marketing, after the disposal of its 20% stake in AXA Affin, will take up a 16% stake in the new merged entity of AXA Affin.

The corporate exercise, which is expected to be completed in the second quarter of this year, will see a new shareholding of AXA Affin where AXA will hold 42.4%, Affin Holdings 33.6%, Felda Marketing 16% and the rest will be held by minority shareholders.