KUALA LUMPUR (May 27): Allianz Malaysia Bhd’s net profit fell 14.59% in its first quarter ended March 31, 2015 (1QFY15) to RM73.64 million from RM86.22 million in 1QFY14, on lower underwriting profit.

Operating revenue for 1QFY15, however, was up 8.21% to RM1.1 billion from RM1.02 billion in 1QFY14, to which the group attributed to higher gross earned premiums and investment income, its filing to Bursa Malaysia today showed.

Underwriting profit was at RM53.4 million, down 29% from RM75.3 million in 1QFY14, which saw unusually low claims ratio of 53.5%.

The group, however, recorded a higher profit for the life insurance operations, but registered a loss in its investment holdings segment.

“The life insurance operations recorded a higher profit before tax of RM30.4 million for the financial period ended March 31, 2015; an increase of 46.9% or RM9.7 million as compared to the preceding financial period ended March 31, 2014 of RM20.7 million, due to higher profit contributed from investment-linked products for the financial period under review.

“The investment holding segment registered a loss before tax of RM2.1 million as compared to a profit before tax of RM0.7 million in the preceding year due mainly to levy cost for insurance guaranteed scheme charged to the shareholders' funds for the financial period under review,” Allianz said.

Moving forward, the group said that it will be able to maintain profitability, despite modest consumer sentiment for the sector following the implementation of the goods and services tax.

“The group will endeavour to maintain profitability and sustain market share by offering superior products and services, strengthening its distribution capabilities and relationships with partners, as well as focusing on delivering operational excellence.

“The board is cautiously optimistic that the Group’s initiatives will enable the group to be positioned strategically in the market and continue to deliver profitable results,” it added.

Allianz (fundamental: 1.6; valuation: 1.95) closed 1.54% or 20 sen lower at RM12.80, for a market capitalisation of RM2.14 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)