Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (Feb 22): Allianz Malaysia Bhd’s fourth quarter net profit dipped 0.22% to RM86.78 million from RM89.98 million a year earlier, on higher claims and management expense ratio in its general insurance segment.

Earnings per share for the fourth quarter ended Dec 31, 2017 (4QFY17) fell to 49.94 sen from 52.95 sen in 4QFY16, the group said in a filing with Bursa Malaysia.

Revenue dropped marginally to RM1.209 billion from RM1.211 billion previously.

Allianz said the combined ratio in its life insurance segment rose by 2.6 percentage points on higher claims ratio, mainly contributed by the floods in the northern region.

As for higher management expense ratio, Allianz said it was mainly contributed by higher provision for impairment of insurance receivable in 4QFY17 compared to the corresponding period last year.

Its life insurance operation saw increased profit because of more contribution from the protection business, it added.

Loss before tax in the investment holding segment narrowed to RM500,000 from RM1.3 million in 4QFY16 as a result of lower operating expenses.

For the full year, net profit went down 7.74% to RM287.96 million from RM312.13 million in FY16, while revenue climbed 2.62% to RM4.8 billion from RM4.68 billion.

Going forward, the group expects competition to intensify in 2018 with the current phased liberalisation in the general insurance industry leading to full liberalisation in July 2019.

Technological advancement and higher consumer expectations will also play a role in changing the competitive landscape, so the group’s general insurance operation will need to differentiate its product beyond pricing to improve customer satisfaction and to maintain customer loyalty.

The general insurance operation will continue to protect its earnings and market share by offering superior products, differentiating its services, expand its distribution capabilities including venturing into digital partnership, and moving into online sales platform.

Meanwhile, the group said the life insurance operation will become more significant in terms of contribution to Allianz’ earnings while adopting a multi-distribution strategy, increasing recruitments, and improving agency professionalism and productivity.

“Business from bancassurance channel is expected to continue to grow and contribute more significantly to the life insurance operation. The group will continue to focus on optimising its insurance businesses and deliver sustainable returns to shareholders in 2018,” it added.

Allianz’s share prices fell six sen or 0.46% to close at RM13.10 for a market capitalisation of RM2.29 billion.

      Print
      Text Size
      Share