March 2, 2015: Khazanah Nasional Bhd’s subsidiary, Avicennia Capital Sdn Bhd, aims to invest in the insurance industry of the emerging markets in the Southeast Asia.

Its primary focus is on life, health insurance and general insurance, in Malaysia, Indonesia, the Philippines, Singapore and Thailand.

Avicennia Chief Executive Officer Alexander Ankel told local media, The Star, that the firm was open to all insurance services in Malaysia, but will focus on life, pension, health and travel insurance in other target markets.

The insurance holding company hopes to explore the best practices around takaful insurance in Malaysia, and plans to develop similar model for Turkey, where there is growing interest. Takaful insurance is known as Participating Insurance in Turkey. “We see from their banks that they want to start consumer loans and savings products built around the Islamic financing principle,” Ankel said in the report.

As of last April, Khazanah’s investments in Turkey amounted to more than $2 billion. “Our recent investment in Acibadem Saglik ve Hayat Sigorta (Acibadem Sigorta) is emerging as one of Avicennia’s pillars. Turkey’s close proximity to Europe also promises growth potential supported by the government’s legislation,” Ankel said. The firm had, in November 2013, completed the $252 million acquisition of a 90 per cent stake in Acibadem Sigorta, a major health and life insurer in Turkey with the second-largest health insurance market share in the industry.

The two other companies under Avicennia’s portfolio are CIMB’s Sun Life Malaysia Assurance Bhd and Sun Life Malaysia Takaful Bhd, which were acquired in April 2013.

Avicennia’s investment strategy targets companies that have reached, or are reaching, critical mass in terms of skill sets combined with relevant distribution capabilities, specifically banking, that cater for sustainable growth.

Speaking on the outlook for the insurance industry in 2015, Ankel said it was expected to grow one to two per cent ahead of gross domestic product (GDP) growth and would most likely exceed that target.

“GDP targets might be revised due to (low) oil prices and the hike in the US dollar, but these changes are cyclical and temporary,” said Ankel, adding that Avicennia would eventually introduce a micro-insurance model targeting developing countries outside of Malaysia.

Khazanah Nasional is the state investment unit of Malaysia.