Allianz Malaysia’s 4Q19 earnings jump 33% on life insurance growth

By NUR HANANI AZMAN / Pic By TMR File

ALLIANZ Malaysia Bhd’s net profit for the fourth quarter ended Dec 31, 2019 (4Q19), jumped 33% to RM133.08 million from RM100.04 million in the corresponding quarter last year, thanks to higher revenue contribution from the life insurance segment.

Revenue for the quarter rose 7.9% to RM1.41 billion from RM1.3 billion in the same period a year ago due to higher gross earned premiums and investment income by RM89.6 million and RM13.7 million respectively, the group told Bursa Malaysia yesterday.

The life insurance segment registered an operating revenue of RM817.2 million, up 13.7% from RM718.7 million in 4Q18 due to higher gross earned premiums and investment income by RM86.1 million and RM12.4 million respectively.

The increase in gross earned premiums was mainly contributed by higher premiums from agency, bancassurance and employee benefits channels.

For the general insurance segment, operating revenue inched up 0.9% to RM585.2 million from RM580.2 million in 4Q18 on stronger gross earned premiums and investment income by RM3.5 million and RM1.5 million respectively.

The higher gross earned premiums were attributable to higher premiums from the motor business.

For the financial year ended Dec 31, 2019 (FY19), Allianz’s net profit rose 30.6% to RM492.48 million from RM377.02 million previously, underpinned by higher profit contributions from the life insurance segment.

Revenue for FY19 was up 6.8% at RM5.53 billion versus RM5.18 billion last year due to higher gross earned premiums and investment income by RM301.4 million and RM51.1 million respectively.

Gross written premiums (GWP) for the year climbed 9.3% to RM4.92 billion from RM4.5 billion the year before, largely contributed by Allianz Life.

For the general insurance subsidiary, GWP increased 3.6% to RM2.2 billion from RM2.12 billion in FY18. Meanwhile, GWP for the life insurance segment jumped 14.3% to RM2.73 billion from RM2.38 billion in FY18.

“Growth for the general insurance industry is expected to remain challenging in the medium term amid moderation in both global and local economic growth and pending the next phase of liberalisation of motor and fire tariff,” Allianz said.

It said industry growth in general insurance remained weak with only a slight pickup in the second half of the year, and a decline in GWP by -0.8% for FY19 after falling -1% in the first three quarters of 2019.

This was mainly due to a decline in the health and miscellaneous lines of business.

However, the life insurance industry reported an increase of 14.8% in annualised new premiums last year, following a 13.9% expansion in the first three quarters of 2019.

“Notwithstanding the double-digit growth in 2019, the life insurance segment is cautious on the impact of slower global growth arising from the coronavirus outbreak at the beginning of 2020 to local economic activities and its impact to the life insurance segment’s growth and investment performance,” Allianz said.