KUALA LUMPUR (May 13): CIMB Group Holdings Bhd is growing its insurance arm via an education-based product in collaboration with Sun Life Malaysia.
CIMB Group's (fundamental: 1.05; valuation: 2.25) unit CIMB Bank Bhd chief executive officer Datuk Sulaiman Mohd Tahir said the group was collaborating with Sun Life to roll out the insurance product known as Sun EduSmart.
"The price of education has gone up. The whole idea is to start saving now as things get more expensive over time.
"It is not a luxury item. This is something that you must do if you care about your child." Sulaiman told reporters at the launch of Sun EduSmart here today.
According to him, Sun Life will manage the plan's funds. Sulaiman said Sun Life was positive about the growth of the insurance plan, and was looking at a 20% annual growth over the next five years.
Sulaiman said the product had seen positive response since its soft launch in January this year.
The product had so far generated RM1.2 million in first-year annual premium (FYAP) from some 200 policy holders.
He said CIMB Group was hopeful of securing 5,000 policies by year end, a move which should result in about RM25 million worth of FYAP.
CIMB Group's move to expand its insurance unit comes at a time when the group had seen weaker financials.
Net profit fell to RM3.11 billion in financial year ended December 31, 2014 (FY14) from RM4.54 billion a year earlier. Revenue was lower at RM14.15 billion versus RM14.67 billion.
CIMB Group is scheduled to report its 1QFY15 results this month. Today, CIMB Group shares fell eight sen or 1.4% at 2.32pm to RM5.82 for a market capitalisation of RM49.41 billion.
The stock had risen 5% this year versus the FBM KLCI's 2% gain.
(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.)