The decline is due to the increases in motor claims cost that emerged in the middle of 1Q17
By NG MIN SHEN / Pic By AFIF ABD HALIM
Tune Protect Group Bhd’s net profit for the second-quarter ended June 30, 2017 (2Q17), fell 50.9% to RM13 million from RM26.47 million recorded a year ago, on higher claims from its motor insurance business and weak revenue from its digital global travel business.
“The decline was due to the larger than expected increases in motor claims cost that emerged in the middle of 1Q17, plus subdued top line of our digital global travel as a result of the Malaysian Aviation Commission’s opt-in ruling on ancillary offerings online,” its group CEO Razman Hafidz Abu Zarim noted in a statement last Friday.
Its 2Q revenue came in at RM133.88 million, a slight increase from RM125.54 million previous corresponding quarter, largely due to higher gross written premiums driven by the company’s motor, offshore oil and engineering segments, as well as Middle East travel businesses.
The company said for its global travel business, a number of pricing and marketing initiatives that have been rolled out are expected to gain traction in the top line during the second-half of the year.
“We have also secured a new airline partner — Cambodia Angkor Air, our fourth airline partnership, slated to commence in 3Q this year. This brings us closer to our vision of becoming a leading travel insurer in the Asean region,” Razman Hafidz said.
Efforts are ongoing to address the high claims from the company’s motor insurance business, amid intensified competition following the liberalisation of the motor and fire insurance segments in the country.
The company will concentrate on providing further online accessibility and product differentiation via risk-adjusted pricing.
“To alleviate the higher costs of motor claims, we have re-directed car repairs to non-franchise panel workshops to minimise the cost.
“We are also revising the way we evaluate franchise vehicles that have higher loss exposure, and are reviewing the ‘beyond economic repair’ level to curb total loss exposure,” Razman Hafidz added.
He said the group expects to see the positive impact of its initiatives in its financial year ending Dec 31, 2018, or at earliest, 4Q17.