Tune Protect posts net profit of RM13.41mil in 2Q18

By Digital News Asia August 30, 2018

The group sees gross written premiums of RM122.1 million in 2H18
2H18 operating revenue stood at RM141.3 million; profit after tax at RM13.4 million

Tune Protect posts net profit of RM13.41mil in 2Q18

TUNE Protect Group Bhd posted a slightly lower net profit of RM13.41 million for the second quarter ended June 30, 2018 (2Q18) compared with RM13.44 million in the corresponding quarter last year.

Revenue increased to RM141.26 million from RM133.88 million previously, it said in a filing to Bursa Malaysia.

The group saw gross written premiums (GWP) of RM122.1 million with operating revenue (OR) of RM141.3 million and profit after tax (PAT) of RM13.4 million for the second quarter of 2018.

PAT for 1H18 recorded an 18% increase year-on-year to RM31.7 million. This was attributed to increased underwriting profits by 42% year-on-year from lower net claims and reduced management expenses.

OR increased by 8% contributed from higher premiums in Motor and Travel classes of business, as well as better investment income.

The group’s general insurance business in Malaysia recorded a 1H18 PAT increase of 31% year-on-year and 2Q18 PAT increase of 65% year-on-year. The growth in business was contributed by higher quota share arrangements, favourable prior years claim development and better collection of receivables.

The digital travel global business recorded a broad-based increase of 8% in GWP whilst the number of policies issued also increased by 86% in 1H18 amongst the major airline partners.

Leveraging on digital innovation

A key initiative this year is a consolidation of the various digitisation initiatives in the group, to deliver a unified mobile application and an intuitive website.

The deployment of this project will entail the integration of an omni-channel customer support suite to service varied customer behaviour patterns within a singular platform.

This will also improve the speed to market of the group’s on-demand products. Together, these will align Tune Protect Group’s business model to meet the needs of its online customers.

“The initiatives we (Tune Protect) are putting into place in 2H18 are fundamental to our digital agenda. We are now able to reach a wider market place and ensure that we remain competitive in an increasingly fast-moving economy,” said group chief executive officer Razman Hafidz Abu Zarim.

To bring P2P insurtech to Malaysia

Other initiatives, especially on the insurtech front, as announced in the prior quarter have come to fruition.

This quarter sees the successful completion of Tune Protect Group’s investment in Laka Ltd, a UK based peer-to-peer Insurtech company where the group now holds 9.99% equity interest. This investment allows Tune Protect to replicate similar business model in Malaysia by the end of the year.

“Tune Protect is on track to replicate this business model in Asia in the near future. We are very excited to unlock this untapped market and to provide the platform to connect people with similar interests,” added Razman.

Diversifying the business

The group continues to pursue market expansion by penetrating an enlarged Indo-China and Middle East customer base.

While B2B channels were established for Cambodia, China and Vietnam in March 2018, 2H18 welcomes D2C (direct-to-consumer) channels going live for Wataniya Airways and Cambodia Angkor Air.

The longer-term view that is envisaged from these partnerships include increasing the premiums contribution mix and establishing even stronger credentials of successfully working with multiple airline partners.

Leveraging on existing travel insurance capabilities and experience, the group continues its pursuit for personalised travel insurance plans with enhanced dynamic pricing.

This approach in optimising algorithms to further personalise offers leading to higher take-up rates will be in five key markets, namely Malaysia, Thailand, Indonesia, China and Singapore.

Retakaful travel remains as a constant growth area for Tune Protect with access into the sizeable Muslim markets in the Middle East and Indonesia via partnerships with takaful underwriters worldwide.

Retakaful travel went live with UAE in August 2018, the second market to offer travel takaful backed by Tune Protect after Bahrain, which went live in 2Q18.

The retakaful business will be further expanded to other Middle East markets and Indonesia in 2H18. The group is also in talks with AirArabia to offer takaful products alongside their current offerings.