International Labuan firm sees 2020 as exciting year
Published on: Monday, December 09, 2019
KUALA LUMPUR: Munich Re Syndicate Labuan Ltd (MRS Labuan) sees 2020 to be an exciting year, with its top line poised to grow 35 per cent for the financial year ending Dec 31, 2020, thanks to the insurance tariff liberalisation, optimism over the revival of mega projects, as well as the company’s diversification initiatives that kicked off at the beginning of this year.
General Manager and Principal Officer James Ng (pic) said the growth in 2020 would be similar to the performance projected for 2019.
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He said the introduction of the phased liberalisation of motor and fire tariff by Bank Negara Malaysia on July 1, 2016 had brought huge opportunities for insurers in the country, particularly specialty reinsurers like MRS Labuan.
“The tariff liberalisation has helped the development of product innovation in the industry, and has created huge opportunities for us,” he said.
Speaking to Bernama recently, Ng said among the innovative coverage offered by MRS Labuan included the Offshore Contractor’s Plant and Machinery All Risks coverage, which is considered quite specialised, as not every underwriter would have the capability to underwrite the product package.
“Traditionally, general insurers tend to focus more on personal accident, fire, medical and health, as well as motor insurance.
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“With the liberalisation kicking in, the initiative might potentially cause them to see their (gross written) premium shrank (due the competitive market), hence, they would start looking out for us for the specialty coverage and collaborate with us,” he said.
Ng revealed that over the past 12 months, the company had been working with a number of local insurance and a few international companies to grow their business lines.
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“Therefore, next year is an exciting year for MRS Labuan because insurance companies which traditionally focus on motor, construction or property coverage will come to the specialty reinsurers like us.
“That is how we can complement them and grow the business with them,” he said.
He pointed out that rather than just focused on the conventional marine and energy sectors, MRS Labuan had, earlier this year, diversified its products offerings to include financial lines, cyber, engineering, standalone terrorism and contingency solutions.
In August 2019, the company also launched a worldwide machinery insurance cover for the market, a unique hybrid of marine, property and engineering, he said.
Following the introduction of the new product lines this year, Ng was confident that the company would see bright prospects for 2020.
Commenting on the company’s performance, Ng said as of end-October 2019, its top line saw a 35 per cent year-on-year (y-o-y) growth, while the bottom line also improved by over 20 per cent y-o-y.
“In the past, 90 per cent of the company’s book is contributed by marine and energy segment. After the diversification process, the segment is expected to contribute over 60 per cent to the total book, with the rest contributed by the diversified products,” he said.
Elaborating on the company’s speciality, Ng said MRS Labuan was quite well positioned in project cargo insurance coverage.
“This insurance requires special engineers to monitor the shipment, because it could involve the shipment of a huge turbine of a power plant being shipped from factories to another designated destination.
“We have a very strong team of risk engineers, and we have quite a significant amount of capacity on that,” he said.
On the comeback or introduction of several mega projects announced under the 2020 Budget, Ng, again, was upbeat that the good news would further propel MRS Labuan’s performance next year.
“Whatever mega projects announced by the government, it will have a positive impact on every industry, including us.
“Even though we haven’t seen much (of the) mega projects being carried out this year, but from the news that have been reported, the government have put several projects in the pipeline, it will actually benefit us in terms of the growth,” he added.
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