Rexit to make big strides in Japan

Rexit to make big strides in Japan



By C. S. Tan

PETALING JAYA: Rexit Bhd got closer towards taking a big step into the insurance market in Japan when it received a letter of intent from Marubeni Safenet Co Ltd on Monday.

Marubeni Safenet, a wholly-owned subsidiary of Marubeni Corp of Japan, sent a letter of intent (LOI) to Rexit International Sdn Bhd, a subsidiary of Rexit Bhd, for implementation of its insurance software and services for the Japanese company.

“Marubeni does not lightly issue an LOI. When it gives an LOI, a contract is likely to issued soon, maybe in a month or two,” industry sources said yesterday.

When that happens, it would be a giant step for Rexit because Marubeni Safenet is a giant even on the scale of the huge Japanese insurance market.

In a note on Rexit yesterday, Aseambankers said Marubeni Safenet was an insurance agency that counted the top three non-life insurers in Japan as its clients, namely Tokyo Marine, Sompo Japan and Mitsui Sumitomo.

These three clients account for more than 62% of Japan's non-life insurance market.

Aseambankers expects the Rexit portal would go live in Japan in July next year. It is understood that Rexit would then replace the current process there of issuing paper documents and physical delivery of policy documents with its e-Cover portal.

The brokerage also expects Rexit International would adopt a model based on a percentage of Marubeni Safenet's insurance premium revenue.

“Any percentage would be a lot for Rexit International because Marubeni Safenet's revenue is in the billions of US dollars,” the sources said. Marubeni Safenet represents 25 non-life companies and 15 life insurance companies in Japan.

Rexit International is a joint venture company that is 51% owned by Rexit Bhd and 49% owned by Marubeni Corp.

The joint ownership with Marubeni does not, however, automatically ensure the Japanese group would outsource the information technology (IT) services of its insurance group to Rexit International.

The Malaysian company has to undergo a thorough evaluation by Marubeni Safenet, a process that started in October last year.

There is increasing confidence that the arrangements made so far would lead to a contract and implementation of Rexit's e-Cover portal for Marubeni. Some fund managers believe that.

T. Rowe Price Associates Inc, for instance, bought an 8% stake in Rexit.

Aseambankers said that since it initiated coverage of the stock in January, large investment funds, both local and foreign, had become significant shareholders of Rexit.

That may explain the relative stability of Rexit's share price, which occasionally jumps, then follows a flattish trend but does not fall sharply.

Rexit is now one of the largest companies listed on the Mesdaq Market in terms of its market value of about RM550mil. The stock rose 30 sen to RM2.92 yesterday.