by ASILA JALIL/ pic by TMR FILE

ALLIANZ Malaysia Bhd expects its performance for the current financial year to be better than last year despite physical limitations in engaging with clients as a result of the Movement Control Order (MCO).

Its CEO Zakri Mohd Khir said although the decision to purchase insurance products depends on consumers, he assured the group’s bottom-line performance will not be affected by the Covid-19 pandemic and expects the composite insurer to post a marginal increase in its revenue for the whole year.

“The next six months depend on consumer’s consumption which has already been impacted by the loan moratorium as people have a little bit more money. What we see are economic activities that translate into some form of insurance sales.

“For the bottom line, we do not see any adverse impact from Covid-19 or anything as of yet and if this continues, then probably the bottom-line figures will be better than last year’s in terms of core profit,” Zakri said at a virtual press conference after the group’s AGM yesterday.

He added that the group’s top line may see a decent single-digit growth for the year.

Zakri said the coronavirus made it difficult for life insurance agents to engage with customers due to the movement restrictions enforced which dragged the sales of policies.

With the restrictions eased, Zakri said the group is seeing a pickup in sales and helping improve its overall performance.

He, however, is not able to anticipate if the policyholders and potential customers would be affected when the loan moratorium ends in September.

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

Revenue for FY19 increased 6.8% YoY to RM5.53 billion as gross premiums and investment income rose by RM301.4 million and RM51.1 million respectively.

In terms of the number of claims, Allianz Life Insurance (M) Bhd CEO Joseph Gross said for the life insurance segment, medical claims reduced during MCO, but have now picked up again as surgical operations are taking place and the public are visiting healthcare facilities to seek treatments.

“The question lies in the cost of treatment and how will that further evolve given medical practitioners and hospitals now have new standard operating procedures in place such as the need to wear personal protective equipment suits when treating patients, the number of people treated, and requirements on cleaning and hygienic measures to adhere to,” he said, adding that there will be a cost inflation pressure for treatment.

The fair value losses present in the first quarter ended March 31, 2020 (1Q20) will not continue into the group’s 2Q20 results, according to Gross.

Allianz’s net profit dropped 19.6% YoY in 1Q20 to RM79.5 million due to lower earnings from its general and life insurance segments.

Revenue increased 10.4% YoY to RM1.48 billion in 1Q20, underpinned by higher gross earned premiums and investment income.