Merger and acquisition in takaful sector

Over the last two years, M&As in the Malaysian insurance sector have mainly involved conventional insurers, and analysts foresee some consolidation taking shape in the takaful sector in view of the Financial Services Act (FSA) and the Islamic Financial Services Act (IFSA). Among the candidates for potential M&As are Takaful Ikhlas Sdn Bhd, a unit of MNRB Holdings Bhd, and Syarikat Takaful Malaysia Bhd (STMB). The IFSA may prompt MNRB to sell its stake in Takaful Ikhlas to a strategic partner, as further internal capital injections could be complicated. In the next few years, the main thrust for M&As is expected to be on the general insurance and general takaful industry. The life insurance sector sees to have consolidated somewhat for the time being.