KUALA LUMPUR: The Pacific Insurance Bhd, a wholly-owned subsidiary of Canada-based Fairfax Financial Holdings Ltd, anticipates its premium income in the non-life insurance segment to grow 150% to RM1 billion in three to five years from RM400 million currently.

On March 1 this year, The Pacific Insurance completed the acquisition of the general insurance business of MCIS Insurance Bhd, which sees the latter becoming part of Fairfax Asia Ltd, the Asian holding company of the Fairfax group.

In its first year post-merger with MCIS Insurance, Fairfax Asia chairman Ramaswamy Athappan said the group expects double-digit growth in The Pacific Insurance’s premium income this year compared with 7.5% last year.

On market share he said, “Ideally, we would want to grow to at least 10% in five years’ time, depending on market conditions.” He was speaking at a press conference yesterday on the completion of the merger.

He said The Pacific Insurance’s personal lines business — which refers to insurance that covers individuals or families like health insurance, motor-car insurance and travel insurance — is expected to contribute the most to the group’s revenue moving forward.

“Typically, in the Malaysian market, motor-car insurance is the predominant class of business,” he said, but he noted that the greatest contributor to The Pacific Insurance group is actually its medical insurance.

Medical makes up about 34% or RM60 million of the group’s revenue, compared with the motor-car segment, which currently stands at 25%.

Ramaswamy added that the company is also looking to launch new products like bank credit insurance, marine hull insurance and home protection insurance.

Post-merger, the company expects its assets under management to soar to RM1 billion in two years from the collective RM600 million currently.

“The penetration of general insurance in Malaysia is very low and there is a potential to grow,” he said.

To recap, The Pacific Insurance was granted approval by Bank Negara Malaysia to acquire the general insurance business of MCIS and enter into a business transfer agreement with MCIS and Koperasi MCIS Bhd to effect the transaction in December 2014.

Ramaswamy, however, declined to reveal the acquisition costs, merely saying that “it was on [a] willing buyer, willing seller basis”.

On its business in the Asean region, Ramaswamy said it is eyeing to acquire more insurance businesses because “mergers and acquisitions (M&A) can make you grow stronger”.

On whether there would be more M&A in the industry, he said “there are good prospects for doing that but the number of companies has shrunk.”

On a related note, he said M&A would allow insurance companies to sell more broad-based insurance products.

He noted that in four to five years, Fairfax’s insurance business in Malaysia — now at 10% of group revenue — could overtake its Singapore counterpart, which currently stands at 40%.

Apart from Singapore and Malaysia, Fairfax Asia also operates in India, Indonesia, China, Singapore, Hong Kong, Thailand and Sri Lanka. Its unconsolidated revenue stood at US$2.6 billion in 2013.

This article first appeared in The Edge Financial Daily, on April 1, 2015.