by ASILA JALIL / pic by TMR FILE

ALLIANZ Malaysia Bhd is expecting 2021 to be another challenging year for the general and life insurance industry as the pandemic remains a threat towards economic recovery, which is underpinned by an effective rollout of the vaccine programme.

The insurance group recorded a lower net profit for its first quarter ended March 31, 2021 (1Q21), which came in at RM63.26 million, down 20.4% year-on-year (YoY) due to lower contribution from its life insurance segment.

The group’s revenue for 1Q21 rose 8.2% YoY to RM1.61 billion due to higher gross earned premiums and investment income by RM105.3 million and RM16.6 million respectively.

The life insurance segment registered a pretax loss of RM20.2 million for the quarter under review, a decrease of 186% YoY or RM43.7 million compared to a pretax profit of RM23.5 million in the same period last year.

The decline was attributed to higher fair value losses on investments arising from higher interest rates.

The investment holding segment posted a loss before tax of RM5 million in 1Q21 compared to a loss before tax of RM6.1 million in 1Q20 due to lower expenses.

Allianz’s general insurance segment, however, delivered a pretax profit of RM92.6 million in the quarter, an increase of 24.3% YoY or RM18.1 million compared to 1Q20 which was RM74.5 million.

The higher pretax profit was driven by lower expenses and savings from motor claims from less traffic during the movement restriction imposed in 1Q21.

Operating revenue for the general insurance segment came in at RM631.5 million in the quarter, up by 4.4% or RM26.9 million from RM604.6 million in 1Q20 due to an increase in gross earned premiums by RM28.2 million, which is offset by a decrease in investment income by RM1.3 million, Allianz noted in its exchange filing yesterday.

Its life insurance segment’s operating revenue rose 10.9% YoY or RM95.3 million to RM972.1 million due to increases in gross earned premiums and investment income by RM77.1 million and RM18.2 million respectively.

The group recorded a total gross written premiums (GWP) of RM1.48 billion in 1Q21, while its total assets grew 12.3% to RM21.71 billion in the quarter compared to RM19.33 billion in the same period last year.

“We knew the after-effects of the Covid-19 pandemic would be slow to dissipate, and one year on, many countries, including Malaysia, still find themselves shackled by the relentless effects of Covid-19 as it continues to experience a stop-start recovery,” said the group’s CEO Zakri Khir (picture).

He said the group will continue to employ short-term strategies and continue to improve business agility as it looks towards another challenging year.

The group’s general insurance subsidiary, Allianz General Insurance Co (M) Bhd, recorded RM656.4 million GWP in 1Q21, a 7% increase from RM613.6 million in 2020.

Underwriting profit improved by 84% YoY to RM48.4 million in 1Q21.