Tune Ins Holdings Berhad. Financial Results March 2015 Analyst Presentation May 2015

Transcription

1 Tune Ins Holdings Berhad Financial Results March 2015 Analyst Presentation May

2 Agenda Page Executive Summary 3-7 Key highlights 1Q2015 financial highlights Update on Strategies Snapshot of Indonesia Acquisition Concluding Remarks 1Q2015 Financial Performance Appendices

3 Key Highlights A steady start to 2015 Continuing growth in Travel Business with healthy 17% increase in top line due to improvement in take up rate in main markets especially Malaysia despite softening travel demand in Jan & Feb, Travel portfolio diversification on track with non-airasia partners representing 8% of total GWP in 1Q2015 v. 2% in 1Q2014, TIMB (Malaysia) delivering PAT growth of 34% (excluding one-time gain on sale of building in Q1FY14) driven by investment income & lower claims liability and MMIP provisioning, Middle East joint venture posted a strongest profit in 1Q15 exceeded year-to-date profit in 2014, benefitting from greater footprint in Mena & EU regions, Proposed acquisition of 50% + 1 share in PT Asuransi Staco Mandiri (ASM) on track with target close by middle of Currently engaged with Indonesia and Malaysia regulators, Delivering long term sustainable value to our stakeholders proposed dividend payment of 4.04 sen in April 2015 (dividend payout ratio of at least 40%). 3

4 1Q2015 Financials Strong PAT, exclusive of one-time gains Operating Revenue (OR) 111.2m 2% Net Earned Premium (NEP) 66.0m 3% Profit After Tax (PAT) 17.2m 16% PAT (excluding one-off in 1Q14) 17.2m 7% Profit Contribution from Overseas Ventures 5.2% Stable operating revenue QoQ attributed by lower GEP due to lower retention of medical business offset by higher investment income from collective investment scheme NEP growth of 3% driven by continued growth in Global Travel & higher retention in motor business mitigated by UPR strain due to 50% quota share of medical business On a normalised basis, PAT growth of 7% QoQ after excluding one-off gain on sale of building of RM4.2 mil in Q1FY14 Contribution from overseas ventures of 5.2% driven by Thailand affiliates and Middle East Join Venture in Q1FY15 4

5 We remain on track in executing our business strategies Strategies Continue to grow with AirAsia Global Player in Travel Insurance Strengthen digital business fundamentals Malaysia Enhance distribution channels& optimize retention Strategic Acquisitions Performance To Date AirAsia Partnership: Gross sales growth of 8% YoY Increase in TUR Flown by +0.5% over 4Q14 Cebu Pacific Partnership: Gross sales growth of 29% YoY Non-AirAsia partners make up 8% of Global Travel GWP, up from 2% in 1Q14 On track to launch new website and mobile platform by 3Q15 Retention ratio of 47% in Q115 Vs 45% in Q114 Underwriting margin impacted by UPR strain Indonesia Target completion within 3 months Thailand Continuous branding & marketing activities Activities 1) Lifestyle Protection Plan Launched in Malaysia in Jan. Next rollout targeted for Thailand & Indonesia 2) Baggage Protection Insurance : Target to launch by 3Q 3) Launched Sri Lanka, Nepal & Korea markets in Feb 4) Activated Taiwan in 2Q 5) Travel insurance for civil servants launched in Jan 1) Cebu Pacific : Activate UAE & Qatar by 2Q Product enhancement for current routes by 2Q 2) AirArabia / Cozmo : Launched Armenia, Iraq & Lebanon in 1Q Launched Visit Friend & Relative Embed (VFRE) product in 1Q in UAE Launched Family Plan Insurance in 1Q for Cozmo 3) Pursuing airline & non-airline partnerships 1) Web revamp & mobile app development in progress 2) Pursuing e- commerce partnerships 1) Tied up with additional new car franchise dealers for profitable subsegment 2) Managing portfolio: Reduction of motor quota share to 10% & increase of medical quota share to 50% 1) Indonesia : Announcement on acquisition of ASM on 5 May 2) Thailand : Boonterm Machine (Quicksurance) o Average sales of >54k policies sold via ~40k top up machines o Expand to target traveling students, foreign workers and tourism partnership with Visa 5

6 Indonesia Acquisition On Schedule Where are we? Executed Conditional Binding Offer with PT Asuransi Staco Mandiri ( ASM ) and its shareholders for 50% + 1 share Pursuing approvals with Indonesia and Malaysia regulators, acquisition activities on track as per plan Valuation: P/B of 1.5x with total purchase consideration of RM mil Why Indonesia? Consistent with our ASEAN expansion strategy in General Insurance (Malaysia, Thailand and now Indonesia), delivering on our promise at time of IPO Underwrite directly via ASM and retain profitable travel business within the Group given that Indonesia is 3 rd largest market for our travel insurance portfolio Low insurance penetration rate in Indonesia with growing middle class segment Strong growth potential of ASM s existing portfolio and new blocks of business through local partners / shareholders across ASM s diversified distribution channels including Bancassurance and Corporate What s Next? Target to execute other necessary agreements and documents & transaction close by mid-2015 Finalise detailed business planning and commence post-acquisition integration activities 6

7 Concluding Remarks 1 1 Continuing strong growth by Global Travel despite seasonality in travel demand for 2Q buffered by recovery in travel and take-up rate. 2 Recovery in top-line growth and improved underwriting profit for TIMB post-gst implementation and over subsequent quarters. 3 Indonesia acquisition on track and undergoing regulatory approvals, with transaction close targeted for mid Ongoing discussions portfolio. with airlines/non-airlines partners to expand our travel 5 Digital On track to launch our enhanced digital platform by 3Q15. 7

8 Agenda Page Executive Summary 3-7 Key highlights 1Q2015 financial highlights Update on Strategies Snapshot of Indonesia Acquisition Concluding Remarks 1Q2015 Financial Performance Appendices

9 Full Year 1Q2015 Results - Snapshot Q Q Q1 vs Q1 Variance FY 2014 (RM 000) (RM 000) (%) (RM 000) A B A vs. B C Operating Revenue 111, ,952-2% 451,070 Gross Written Premiums 113, ,708-9% 434,123 Net Earned Premiums 65,983 64,187 3% 267,017 Investment Income 5,580 4,035 38% 27,515 Net fees & commission (12,146) (10,064) 21% (46,585) Net Claims (26,221) (26,318) 0% (108,356) Management and other Expenses (18,520) (16,055) 15% (70,524) Finance costs Share of results of JV >100% 103 Share of results of associates >100% 3,789 PAT (before MMIP) 19,602 23,396-16% 81,564 PAT 17,202 20,396-16% 76,086 PAT (excluding one off) 17,202 16,099 7% 71,789 ROE (annualised) 15% 20% -24% 17% ROA (annualised) 6% 8% -24% 7% EPS (sen) %

10 Travel Business Gross Sales Before Reinsurance^ 42.2m 15% ^ Gross Sales includes AirAsia, Cebu Pacific, AirArabia & Cozmo Gross Written Premium 32.2m 17% Net Earned Premiums 29.5m 11 % Profit After Tax 15.1m 2% Total Policies Issued* 2.04m 3% Country 1Q14 1Q15 Composition Composition Malaysia 47% 55% Thailand 20% 21% Indonesia 13% 8% Others 20% 16% * Policies sold via AIrAsia & Cebu Pacific only Key Highlights Higher NEP of 11% driven by continuous growth in top line partially offset by UPR strain which will be recognised when customers commence their journey. Growth of PAT of 2% driven by higher NEP and unrealised forex gain of RM0.5 mil mitigated by higher commission & ME to support the business expansion. Lower policies issued in 1Q15 Vs 1Q14 partially due to the softness in travel within ASEAN due to post effect of aviation incidents and lower take-up rate as compared to 1Q2014. However, global travel recovery in place and travel insurance business expected to continue its growth path with additional contribution from improvement in take-up rate and additional travel related partnerships. 10

11 Malaysia (TIMB) Gross Written Premiums 98.1m 10% Net Earned Premiums 36.5m 3% Profit After Tax* 3.7m 34% *Excluding one-time property gain in 1Q2014 Key Highlights Lower GWP by 10% due to short term policies issued for certain corporate clients prior to GST implementation. However, GWP is expected to grow with additional new business and the inclusion of remaining period of cover to be reflected in April onwards. Lower NEP of 3% mainly due to the impact of the 50% quota share arrangement in medical class in 1Q15 offset by reduction in motor quota share from 25% to 10%. PAT growth of 34% (excluding one-time gain) mainly driven by investment income and lower net claims due to lower provision for MMIP & claim liabilities. In 1Q2014, TIMB recorded a onetime gain of RM4.2 mil on sale of the building. 11

12 Overseas Ventures Middle East Total Policies Issued 50 thousand Profit After Tax 0.3m Key Highlights PAT of 0.3mil, benefitting from expanded footprint in MENA & EU regions and improvement in take-up rates. Continuing growth in both Cozmo and Air Arabia Travel businesses representing best quarterly results since inception. Launched 3 new markets and registered a network of 16 travel agencies in UAE market. Thailand GWP 9.1 mil Profit After Tax 1.6 mil Key Highlights Top line of RM 9.1 mil underpinned by growth in travel business of 23% & stable corporate business portfolio. Lower PAT QoQ (1Q15 Vs 4Q14) mainly due to one-off bad debt recoveries in Q4FY14. 12

13 Agenda Page Executive Summary 3-7 Key highlights 1Q2015 financial highlights Update on Strategies Snapshot of Indonesia Acquisition Concluding Remarks 1Q2015 Financial Performance Appendices

14 TIH Group: Top line temporary impacted by GST launch Operating Revenue (RM mil) Gross Written Premium (RM mil) + 16% % - 2 % - 9% FY 13 FY 14 Q1FY14 Q1FY15 FY 13 FY 14 Q1FY14 Q1FY15 Net Earned Premiums 1 (RM mil) Investment Income (RM mil) + 11% + 3% % TIMB 59% 60% 58% 55% % Online 41% 40% 42% 45% 4 6 FY 13 FY 14 Q1FY14 Q1FY15 1 Net earned premium = gross earned premium received - premiums ceded to external reinsurers FY 13 FY 14 Q1FY14 Q1FY

15 TIH Group: Higher combined ratio in line with the higher expenses to support business expansion Combine ratio 2 (%) 77.6% 82.6% 82.1% 86.2% 83.9% 88.7% 82.5% 17.6% 17.4% 18.4% 15.7% 15.9% 14.9% 20.1% Commission (%) 39.0% 40.6% 41.0% 39.7% 40.4% 46.7% 34.8% Net claim (%) ME 1 (%) 23.7% 26.2% 25.0% 28.1% 27.6% 24.4% 27.6% Year Q1FY14 Q1FY15 Q2FY14 Q3FY14 Q4FY14 Higher combined ratio reported in 1QFY15 Vs 1QFY14 underpinned by Increase in management expenses for ESOS provisions and higher licensing fees Higher commission payout for Middle East market in line with the growing travel business Higher combined ratio reported in 1QFY15 Vs 4QFY14 attributed to higher claim ratio in TIMB in tandem with the lower NEP amount in Q1FY15 due to (1) short term policies issued for certain corporate clients prior to GST implementation with the remaining period of cover will be reflected in April onwards (2) impact of the 50% quota share arrangement in medical class in 1Q15 offset by reduction in motor quota share from 25% to 10% 1 Management Expense divided by Net Earned Premiums 2 Sum of Net Claims, Management Expenses & Net Fees and Commissions divided by Net Earned Premiums 15

16 TIH Group: Higher underlying PAT, excluding one-off PAT Q1FY14 (RM mil) Q1FY15 (RM mil) RM mil PAT (before MMIP) Online* TIMB Share of associate(thailand) Share of JV * Comprises of TGR & other subsidiaries PAT Year Q1FY14 Q1FY15 Q2FY14 Q3FY14 Q4FY Underlying PAT growth of 7% in 1Q15 Vs 1Q14 driven by continuous growth in travel coupled with the overseas ventures contribution of 0.9 mil, excluding one-off. Lower PAT reported in 1Q15 Vs. 1Q14 attributed to recognition of one-off gain in sales of building of RM4.2 mil in 1Q14; lower NEP in 1Q15 for TIMB due to (1) short term policies issued for certain corporate clients prior to GST implementation with the remaining period of cover will be reflected in April onwards (2) impact of the 50% quota share arrangement in medical class in 1Q15 offset by reduction in motor quota share from 25% to 10% Lower PAT reported in 1Q15 Vs 4Q14 underpinned by lower NEP in 1Q15 for TIMB parallel with the abovementioned explanation higher commission payout for Middle East market in line with the growing travel business Increase in management expense partially due to higher licensing fees in Q1FY15 Excluding one-off Before MMIP 16

17 Malaysia (TIMB) Portfolio Mix Number of Agents No of Agents Non- Motor 52% 68% 70% 72% Total as at Dec 2014 YTD March 2015 Total as at Mar 2015 Recruited Terminated Suspended (A) (B) (C) (D) (E=A+B-C-D) Motor 48% 32% 30% 28% 1, ,167 FY12 FY13 FY14 Q1FY15 Misc, 12% Fire, 21% PA & Medical, 32% Motor, 22% Marine, 13% Misc, 13% Fire, 13% Motor, 28% PA & Medical, 31% Marine, 15% Q1 FY 2014 Q1 FY

18 Malaysia (TIMB) Investment Income (RM mil) Portfolio Mix (31 March 2015) +10.3% % 21.4 Unit and property trust funds, 3.2% Wholesale funds, 68.6% Equity securities, 3.3% Loans, 0.1% Debt securities, 5.6% Deposits with FI, 19.2% Q Q FY 2013 FY 2014 Investment Yield # * * 0.7% 0.7% 3.9% 4.9% Investment strategy remains low risk with a focus on capital preservation to support up streaming of dividends Q Q FY 2013 FY 2014 * Investment yield for 3 months # Investment income (exclude rental income)/investment 18

19 Travel Business (Asia & Middle East) : Number of Policies Issued Continued growth in major markets particularly Malaysia, Philippines and Middle East Asia * Singapore 4% (4%) China 5% (8%) Others 7% (8%) Singapore 4% (4%) China 5% (8%) Others 7% (8%) Indonesia 8% (13%) Thailand 21% (20%) Malaysia 55% (47%) Indonesia 8% (13%) Thailand 21% (20%) Malaysia 55% (47%) * Policies sold via AirAsia & Cebu Pacific Mena & EU^ Egypt 4% Morocco 8% Europe 5% 2.04 million Policies Issued in Q (vs million in Q1 2014) Others 13% U.A.E 55% Egypt 4% Morocco 8% Europe 5% 2.04 million Policies Issued YTD 15 (vs million YTD 14) Others 13% U.A.E 55% ^ sold via AirArabia & Cozmo India 15% 50.0 k Policies Issued in Q India 15% 50.0 k Policies Issued YTD 15 Key (font colour):

20 Travel Business (Asia & Middle East) : Number of Policies Earned Revenue is recognised when a customer commences their journey (date of departure per customer booking) Asia * China 6% (8%) Singapore 4% (5%) Others 7% (7%) Singapore 4% (5%) China 6% (8%) Others 7% (7%) Indonesia 9% (14%) Thailand 21% (21%) * Policies sold via AirAsia & Cebu Pacific Mena & EU^ Europe 3% Egypt 4% Morocco 8% Malaysia 53% (45%) 1.94 million Policies Earned in Q (vs million in Q1 2014) Others 14% U.A.E 56% Indonesia 9% (14%) Thailand 21% (21%) Egypt 4% Morocco 8% Europe 3% Malaysia 53% (45%) 1.94 million Policies Earned YTD 15 (vs million YTD 14) Others 14% U.A.E 56% India 15% ^ Policies sold via AirArabia & Cozmo 46.7 k Policies Earned in Q India 15% 46.7 k Policies Earned YTD 15 Key (font colour):

21 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 March 2015 and announced by the Company on the Main Market of Bursa Malaysia Securities Berhad on 19 May 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. 21