Insurance industry has huge growth in Malaysia: EPF

KUALA LUMPUR: The Employees Provident Fund (EPF) is currently evaluating on the type of assets that can be acquired in foreign insurance companies operating in the country.

EPF is eyeing up to 30 per cent stake in foreign insurers and the evaluation is vital to meet the pension fund manager’s investment profile and returns/risk appetite.

“We are very open towards exploring this (acquisition). We look at the insurance industry as a huge growth sector in Malaysia. We know for a fact that Malaysia is heavily under insurance at this point in time. We know insurance companies have lot of good infrastructure,” chief executive officer Tunku Alizakri Alias said after presenting a briefing on the EPF Financial Performance 2018, here, today.

Alizakri however did not divulge details pertaining to the potential acquisition nor reveal finalisation of any deal.

“It is all about negotiation at this point in time. We will inform (results) soon,” he added.

Alizakri said EPF normally would not go into a big bang approach but rather a strategic acquisition.

“We don’t believe in management control – that is our strategy. 30 per cent (stake) is being put up for sale in foreign insurance companies,” he said.

Alizakri said: “We will definitely take a portion of the stake that is being offered to the market.”

Bank Negara Malaysia (BNM) had instructed foreign insurers to comply with the foreign ownership rule, which requires them to increase the local shareholding up to 30 per cent.

According to EPF, any investments would involve a lot of negotiations and due diligence, which are guided by strategic asset allocation (SAA) to ensure the fund optimises its returns within its risks-tolerance level.

“We have huge governance process and due diligence together with our investments committee before investing,” said Alizakri.

Source : NST