Tune Ins Holdings Berhad ( K) - Financial Results 4Q Analyst Presentation Feb 2014

Transcription

1 Tune Ins Holdings Berhad ( K) - Financial Results 4Q Analyst Presentation Feb 2014

2 Agenda 1. 4Q 2013 Group Financial Results : Key Highlights 2. 4Q 2013 Pro Forma Results 3. Online Insurance Business 4. Tune Insurance Malaysia Berhad (TIMB) 2

3 1. 4Q 2013 Group Financial Results : Key Highlights 3

4 4Q 2013 Results - Key Highlights Continued Growth Group operating revenue RM million up 18.6% v 4Q 2012 and RM million up 71.9% v FY2012 Online travel sales Up 35.4% v 4Q 2012 and 35.8% v FY2012 TIMB sales RM 88.0 million up 22.4% v 4Q 2012 and RM340.3 million up 35.9% v FY2012 Continued diversification 53% of online travel business from non-malaysian markets up from 52% in 3Q 2012 TIMB non-motor insurance up from 51.0% in 4Q 2012 to 66.0% in 4Q 2013 Increased Profits Group PAT - RM23.2 million up 11.1% v 4Q 2012 and RM73.3 million up 51.3% v FY2012 Online travel RM16.2 million up 38.5% v 4Q 2012 and RM53.2 million up 42.6% v FY2012 TIMB PAT RM9.2 million down 39.9% v 4Q 2012 and RM28.5 million down 0.4% v FY2012 Strong Balance Sheet Total assets RM 1,023 million. TIMB CAR Increased from 226% as at 31 Dec 2012 to 269.7% as at 31 Dec Zero debt Low Risk Investments YTD Investment income RM26.9 million; equities < 5% 4

5 4Q 2013 Key Updates Grow with AirAsia Business planning / strategy meeting held with all AirAsia AOCs Nov 2013 to jointly endorse 2014 action plan AirAsia India product and sales process completed for start of business Improve online take-up rates and tailor sales & marketing Rolled-out Tune Insure Plane Livery in Dec 2013 together with multi-plane in-flight marketing. Official sponsor for Bali Beach Run held in Nov Received Brand Award from The BrandLaureate for 2013 Replicate and expand travel insurance business model Launched CEBU TravelSure to Thailand market in Dec Established direct to consumer e-channel (Digital Direct Marketing) via Tune Direct. UAE : Signed JV agreement with Cozmo Travel Capture synergies from TIMB integration and diversify product offering Appointed as a panel insurer for Hyundai w.e.f Jan Renewal of key Petronas policies Collaboration with i-hr Consulting Sdn Bhd providing access to a significant number of SMEs Launched TUNE INSpire CSR Programme reaching out to children with autism and cancer Continued enhancement of core IT systems enabling faster month end closing and MIS Signification reduction in claims files for Third Party Bodily Injury reducing claims liabilities Strategic Acquisitions Indonesia: Terminated CSPA with PT Batavia Mitratama Insurance on 31 Dec. Middle East: JV agreement and Memorandum & Articles of Association signed between TIH and Cozmo Travel LLC on 20 Jan and announced on Bursa. 5

6 4Q 2013 Notable Deals Petroliam Nasional Berhad Alam Maritime Sdn Bhd KLK Group of Companies Bell Group of Companies Hup Chong Furniture Ralco Corporation Sdn Bhd Techcential Sdn Bhd Faithview Realty Sdn Bhd Muhibbah Engineering (M) Bhd HK Kitaran Sdn Bhd JHW Reels Hyundai 6

7 Unaudited Financial Results (Statutory*) Group PAT increased 51% to RM73.3 million YoY; Group PBT increased 32% to RM77.1 million YoY 4Q Q vs 3Q 4Q vs 4Q FY2012* Y-o-Y 4Q Q 2013 FY2013 (Restated) Variance Variance (Restated # ) Variance (RM 000) (RM 000) (RM 000) (%) (%) (RM 000) (RM 000) (%) A B C A vs. B A vs. C D E D vs. E Operating Revenue 107,363 98,810 90, , , Net Earned Premiums 65,806 61,452 55, , , Investment Income 1 8,684 4,793 4, ,873 15, Fees & commission income 6,971 6,163 5, ,359 9, Net Claims (23,339) (21,495) (8,164) (94,032) (43,540) Other Expenses (34,084) (30,839) (31,537) (124,255) (82,128) 51.3 Profit before Tax 24,038 20,074 26, (8.0) 77,056 58, Profit after Tax 23,166 17,623 20, ,338 48, * Based on statutory accounts (TIMB was acquired on 23 May 2012 thus only 7 months results included in FY2012). # Restated after Purchase Price Allocation adjustments for May 2012 OCA acquisition (FY 2012: RM 401K, 4Q 2012: RM 172K) and initial application of MFRS 10 (FY 2012: RM 293K, Q4 2012: RM 293K). 1 Investment income = investment income + realised gains & losses + other operating income 7

8 2. 4Q 2013 Pro Forma 1 Results 1 Per IPO prospectus : The pro forma results were prepared to reflect the financial result for FY2010, FY2011 and FY2012 had the TIMB acquisition been made in

9 Pro Forma Operating Revenue Year-on-year increase through growth in Online sales and TIMB non-motor sales % of Pro Forma Operating Revenue Online TIMB 14.6% 85.4% 17.6% 82.4% 18.0% 82.0% 25.6% 74.4% 13.8% 86.2% 15.9% 84.1% 17.6% 82.4% RM mil Q Q Q 2013 Record quarterly revenue primarily due to strong travel insurance sales of RM 28.9 million in GEP. Key:

10 Pro Forma Net Earned Premiums 1 Year-on-year growth Online % of Pro Forma Net Earned Premiums Online TIMB 25.8% 74.2% 25.8% 74.2% 31.3% 68.7% 40.8% 59.2% 35.5% 64.5% 41.9% 58.1% 43.3% 56.7% RM mil Q Q Q 2013 YoY increase due to growth in Online business, offsetting decline in TIMB s net earned premium reflecting focus on underwriting profits including a 25% motor quota share undertaken to help to de-risk the motor portfolio. Key: 1 Net earned premium = gross earned premium received - premiums ceded to external reinsurers

11 Pro Forma Net Claims 1 & Net Claims Ratio 2 Continued improvement in net claims and net claims ratio RM mil (%) % 52.1% 45.9% 39.0% 35.0% 35.5% 60.0% 50.0% 40.0% % 30.0% 20.0% Q Q Q % 0.0% Claims ratio reflects the continued focus on the expeditious settlement of outstanding claims as well as a more balanced sales portfolio through a focus on quality business. The 4Q 2012 results were due to one off reserve releases following FY12 actuarial assessment after the acquisition of TIMB. Key: 1 Net claims comprises of gross claims paid and gross change to contract liabilities as well as claims ceded to reinsurers and change to contract liabilities ceded to reinsurers 2 Net claims divided by net earned premium

12 Pro Forma Profit After Tax PAT up 54% vs 2012 RM mil Q Q Q 2013 Record quarterly profits in 4Q 2013 due to strong travel insurance earnings and continued consistent underwriting profits from TIMB. Key:

13 Pro Forma Key Operating Ratios Travel insurance and TIMB both contribute to good underwriting margins Pro Forma Management Expense Ratio 1 and Combined Ratio 2 ME Ratio (%) Combined Ratio (%) 30.0% 83.9% 77.8% 78.7% 78.1% 78.1% 75.1% 77.1% 90.0% 25.0% 20.0% 52.7% 60.0% 15.0% 24.2% 24.0% 23.7% 25.4% 10.0% 18.8% 18.1% 14.0% 5.0% 11.5% 30.0% 0.0% 0.0% Q Q Q Q 2013 Combined ratio YoY minor decrease due primarily to lower claims ratio ME ratio QoQ increase due primarily to additional staff bonus provision and royalty expense. Key: 1 Management Expense divided by Net Earned Premiums 2 Sum of Net Claims, Management Expenses & Net Fees and Commissions divided by Net Earned Premiums

14 3. Online Insurance Business 14

15 Sales and Profit Strong growth in travel insurance sales and profit Gross Sales before Reinsurance (RM mil) Commentary % % Gross sales before reinsurance increased 35.8% vs FY2012 with main contributors Malaysia, Thailand, Indonesia and China. The Gross Sales amount are booked premium which will be realized as earned premium when passengers fly 4Q Q Profit After Tax (RM mil) Profit after tax grew by 44.5% due to larger earned premium primarily from more people flying with insurance % % Q Q

16 Number of Policies Issued Continued growth in markets outside Malaysia in FY 2013 particularly Thailand, Indonesia and China China 7% (6%) Others 7% (7%) China 8% (5%) Others 7% (6%) Singapore 4% (5%) Singapore 5% (6%) Indonesia 16% (14%) Malaysia 47% (48%) Indonesia 15% (13%) Malaysia 46% (51%) 2.27 million Policies Issued in 4Q 2013 Thailand 19% (20%) (vs million in 4Q 2012) Thailand 19% (19%) 8.01 million Policies Issued 2013 (vs million 2012) Malaysia 57% in FY 2011, 51% in FY 2012, 46% in FY 2013 Key (font colour):

17 Number of Policies Earned Revenue is recognised when a customer commences their journey (date of departure per customer booking) Singapore 5% (6%) China 6% (5%) Others 6% (6%) Singapore 5% (6%) China 7% (5%) Others 6% (4%) Indonesia 15% (14%) Malaysia 48% (50%) Indonesia 16% (14%) Malaysia 47% (52%) Thailand 20% (19%) 2.27 million Policies Earned in 4Q 2013 (vs million in 4Q 2012) Thailand 19% (19%) 7.79 million Policies Earned 2013 (vs million 2012) Malaysia 52% in FY 2012, 47% in FY 2013 Key (font colour):

18 4. Tune Insurance Malaysia Berhad (TIMB) 18

19 Gross Written Premium and Net Written Premium Fire and Online Travel Insurance drive increase in Premium Gross Written Premium (RM mil) Commentary % % Gross Written Premium ( GWP ) GWP increased YoY and QoQ mainly driven by increase in Fire and Online Travel insurance. Net Written Premium ( NWP ) Excluding motor insurance, NWP increased YoY by RM27 million. 4Q Q Net Written Premium (RM mil) % +2.1% Q Q

20 Portfolio Mix Portfolio well balanced as drive for quality agents selling the right mix of products continues Portfolio Mix Commentary Misc 12.0% Fire 9.0% PA & Medical 24.0% Motor 34.0% Marine 21.0% Misc 4.0% Fire 6.0% PA & Medical 24.0% Marine 17.0% Motor 49.0% Continued efforts undertaken to rebalance TIMB s business portfolio to more profitable segments of non-motor business. Portfolio mix (M:NM) for YTD 2013 is 32%:68% vs 48%:52% for YTD Q Q 2012 Total as at Sep 2013 No of Agents 4Q 2013 Total as at Dec 2013 Recruited Terminated Suspended (A) (B) (C) (D) (E=A+B-C-D) 1, ,138 20

21 Profit After Tax Another quarter of underwriting profits Profit After Tax (RM mil) - 0.4% Commentary Profit after tax decreased QoQ due primarily to a large reserve release in 4Q 2012 following the FY2012 audit after acquisition of TIMB % Q Q

22 Investment & Other Income YoY decrease reflecting minimal equity holding from which to realise gains Investment & Other 1 Income (RM mil) Portfolio Mix % % 23.4 Equity securities 4.5% Loans 0.1% Portfolio Mix As at 31 Dec 2013 Debt securities 27.6% Wholesale fund 12.2% Deposits with FI 39.4% 4Q Q Investment Yield # 0.9% * 1.8% * 3.8% 4.5% 4Q Q Other includes realised gains & losses and other operating income * Investment yield for 3 months # Investment income (exclude rental income)/investment 22

23 Disclaimer This presentation has been prepared by Tune Ins Holdings Bhd ( Company ) in connection with the Interim Financial Statements (unaudited) for the financial period ended 31 December 2013 and announced by the Company on the Main Market of Bursa Malaysia Securities Berhad on 24 February Information contained in this presentation is intended solely for your reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the Company. Neither we nor our advisors make any representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein. In addition, the information may contain projections and forward-looking statements that reflect the Company s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks factors and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company s assumptions are correct. Actual results may differ materially from those projected. 23