Kurnia to diversify and grow non-motor segment

By LEE CHERNG WEE
KURNIA Insurans (Malaysia) Bhd plans to grow its non-motor insurance business to reduce reliance on its motor insurance segment in anticipation of slower car sales.
"We still want to maintain our share in the motor segment. The growth from motor may not be that impressive. Growth will come from the non-motor side. We want to grow our nonmotor business in an aggressive mode," general manager for agency distribution channel Pang Yoke Nam told The Malaysian Reserve in a recent interview.
The Malaysian Automotive Association (MAA) recently reported that February car sales dropped to 36,675 units from 38,527 units in the same month last year. It elaborated that sales of passenger cars fell to 33,281 units in February this year, against 35,437 units in the corresponding month last year while sales of commercial vehicles increased to 3,394 units from 3,090 units.
Currently, motor insurance contributes 84% of Kurnia's income while its nonmotor business accounts for 15%.
Moving forward, the market leader in motor insurance will put greater focus on non-motor insurance products such as fire, property, freight and cargo.
"We have a new team and a chief underwriter has been hired. It's an area where you need a lot of competency. The non-motor chief has put the underwriting and processes in place. We have reorganised and our expansion mode has been looked upon. We now need to train the agents," said Pang.
Pang added that Kurnia has 6,500 agents and is aiming to hire another 1,000 agents starting the next financial year in July.
"We have 30 branches nationwide that conduct business opportunity seminars monthly to attract potential agents," he said.
Meanwhile, Kurnia managing director K H Chia said the company will leverage on its agency network and huge motor policy customer base to cross sell its non-motor insurances.
"We are putting up a call centre and will start cross selling in April," he said.
Kurnia Insurans is a wholly-owned subsidiary of listed insurance group Kurnia Asia Bhd. The latter incurred a group net loss of RM301.79 million for the year ended June 30, 2007 on a turnover of RM1.20 billion.
It suffered a net loss of RM11.99 million, or 0.81 sen a share, for the six months to Dec 31, 2008 compared to a net profit of RM26.72 million, or 1.79 sen a share, in the same period a year ago.

(This story appeared in The Malaysian Reserve on Mar 30, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on insurance & takaful called UNDERWRITER, appearing on alternate Wednesdays, edited by Habhajan Singh.)