Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad) 2QFY16 Financial Results Analyst Presentation 19 August 2016

Transcription

1 Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad) 2QFY16 Financial Results Analyst Presentation 19 August 2016

2 2 AGENDA 01 EXECUTIVE SUMMARY Key highlights 2QFY16 Financial Highlights 1HFY16 Financial Highlights Key Strategies Outlook 02 & FINANCIAL PERFORMANCE Group Global Travel PA Reinsurance General Insurance (Tune Protect Malaysia - TIMB) Overseas Ventures 03 APPENDICES Other Financial Indicators

3 3 Outlook Key Highlights 1 OVERALL Q2FY16 performance NEP growth of 16.6% in Q2FY16 underpinned by continuous business growth especially in motor & other classes of business coupled with higher release in UPR recorded in global travel Investment income growth of 58.9% in Q2FY16 with the amount recorded of RM 9.2 mil in which RM2.8 mil contributed by our share of MMIP results RM29.6 mil recorded in PAT primarily contributed by NEP & investment income growth coupled with our share of profits from MMIP of RM12 mil H1FY16 performance NEP growth of 20.8% yoy mainly supported by growth in motor, medical (foreign workers), fire, travel, engineering & marine classes of business Investment income growth of 35.6% yoy with the amount recorded of RM 15.4 mil in which RM 2.8 mil contributed by our share of MMIP results RM53.9 mil recorded in PAT primarily driven by NEP growth coupled with doubling of PAT to RM 2.1 mil from Thai associate & our share of profits from MMIP Gold Award received in June 2016 in recognition of our innovative zip lock advertisement in conjunction with the launch of Tune Protect brand name 2 GLOBAL TRAVEL PA REINSURANCE PAT of RM 31.2 mil recorded in H1FY16 mainly driven by higher NEP & investment income Non-AirAsia partners contributed 12% to GWP in H1FY16 (up from 9%) Product innovation product enhancement by launching travel coverage beyond 30-day traveling period Continue to enhance customer engagement & services launched unlimited airport Wi-Fi to existing policyholders in selected airports in Malaysia Tune Protect UAE (TPCB) GWP growth of 48.6% yoy in H1FY16 driven by business expansion with new markets launched (Saudi, Georgia & Jordan) & b2b channel 3 GENERAL INSURANCE Malaysia Tune Protect Malaysia (TIMB) PAT of RM28.6 mil recorded in H1FY16 primarily contributed by NEP growth of 29.8% coupled with our share of MMIP PAT of RM12 mil Channel Innovation - Strategic tied-up with the Malaysian postal services for Motor Insurance Thailand Tune Protect Thailand (TIPCL) Doubling of PAT to RM 2.1 mil recorded in H1FY16 mainly attributed to NEP growth and improvement in ME as a result of lower marketing & advertising expenses

4 4 2QFY16 Financial Highlights Q2FY16: RM29.6 mil recorded in PAT primarily contributed by NEP & investment income growth coupled with our share of profits from MMIP of RM12 mil RM mil Operating Revenue RM mil Net Earned Premium OR growth of 8.9% mainly supported by higher GEP amount of RM6.9 mil recorded especially in motor & travel classes of business coupled with investment income growth of 58.9% (with RM2.8 mil investment income from MMIP) 71.1? 82.9 NEP growth of 16.6% underpinned by continuous business growth especially in motor & other classes of business coupled with higher release in UPR recorded in global travel 2QFY15 2QFY16 2QFY15 2QFY16 Profit After Tax RM mil % Combined Ratio PAT growth of 72.0% primarily contributed by growth in NEP and investment income coupled with our share of profits from MMIP of RM12 mil 83.7% 71.2% 71.1% Improvement of 12.5% in combined ratio is due to improvement in TIMB s net claim amount as a result of release of claims liabilities due to our share from MMIP 2QFY15 2QFY16 2QFY15 2QFY16

5 5 Financial Highlights H1FY16: RM53.9 mil recorded in PAT primarily driven by NEP growth of 20.8% coupled with double growth in PAT from Thai associates & our share of profits from MMIP RM mil Operating Revenue RM mil Net Earned Premium OR growth of 12.6% mainly driven by growth in GEP of 11.4% especially in motor, fire & travel classes of business coupled with higher investment income of 4.0 mil (with RM2.8 mil investment income from MMIP) ? NEP growth of 20.8% mainly supported by growth in motor, medical (for foreign workers), fire, travel, engineering & marine classes of business 1HFY15 1HFY16 1HFY15 1HFY16 Profit After Tax RM mil % Combined Ratio PAT growth of 56.6% primarily driven by NEP growth of 20.8% coupled with double growth in PAT from Thai associates & our share of profits from MMIP of RM12 mil 84.9% 73.1% Improvement of 11.8% in combined ratio mainly due to improvement in TIMB s net claim amount as a result of release of claims liabilities due to our share from MMIP & improvement in ME ratio recorded in global travel 1HFY15 1HFY16 1HFY15 1HFY16

6 Performance to date Activities 6 Five Key Strategies Continue to deliver on our strategies Continue to grow with AirAsia Global player in travel insurance Strengthen digital business fundamentals Enhance distribution channels & optimize retention 5 Strategic Acquisition AirAsia: YTD Sales growth of 3% YoY Non-AirAsia partners contribution improved to 12% YTD of Global travel GWP Cebu Pacific Air: YTD sales growth of 40% YoY Air Arabia, Cozmo & B2B: YTD sales growth of 39% YoY YoY growth more than 100% in policies sold via Direct-to-Consumer website and e-commerce partnerships Improved to 17% market share for travel insurance search via Search Engine Marketing (SEM) Tune Protect Malaysia (TIMB) : Improved retention ratio to 46.8% in H1FY16 (up 2.2%) Tune Protect Thailand (TIPCL): Rebalancing of portfolio continues by discontinued motor compulsory Product enhancement - travel coverage beyond 30- day travel period Participated in ground Travel Fairs Offered unlimited airport Wi-Fi to existing policyholders in selected airports in Malaysia Aggressive in digital marketing to promote brand and product awareness Air Arabia, Cozmo & B2B: Partnership with the first Oman based Online Travel platform to offer valueadded services to travelers to/from Oman Partnership with the emerging leader in B2B travel distribution segment to offer travel insurance to its customers Cebu Pacific Air: Enhancement of the microsite Continuous E-Commerce partnerships to drive traffic & sales to our Direct-to- Consumer website via database sharing with: o Overseas Wi-Fi router rental o Taxi-hailing service provider to insure the drivers and riders o o Online automotive site Expanded coverage for baggage wrap insurance in KLIA2 in June via brand Luggage Central, and as well in Singapore airports Offered Dental Insurance via Direct-to- Consumer website in June Continuous promotional campaigns (e.g Travel Campaign (Dr Kartiwa) and several marketing campaigns on social medias Tune Protect Malaysia (TIMB) Strategic tied-up with the Malaysian postal services for Motor Insurance Tune Protect Thailand (TIPCL) Tied up with credit financing company (Sawad) by offering motor & property insurance for its customers Continue to pursue viable acquisition target in Indonesia

7 7 OUTLOOK 1 GLOBAL TRAVEL Industry Passenger demand for air travel continues to be supported somewhat by lower airfares as a result of low oil prices. Upward momentum has weakened in the face of moderate economic growth and terrorism impacts Global Travel business is expected to maintain continuous growth via: Product Innovation: Inbound Travel Plan for Indonesia, standalone product coverage for gadget & baggage Offering travel insurance beyond AA website via our direct link site (B2C) Targeting last minute purchasers by offering free unlimited internet access at selected airports. Targeting all non-purchaser base via daily blasts. Continuous product awareness & educational campaigns via digital & social media platforms. Continue to enhance customer engagement & services via (1) more collaboration with lifestyle companies (2) more tactical & awareness campaign (3) enhancement of E-customer experience portal (4) travel alert apps 2 GENERAL Industry - Malaysia INSURANCE GWP are projected to grow at low single digit; detariffication is expected to increase competition with new product offerings & greater differentiation of service offering etc. Tune Protect Malaysia (TIMB) Continue to outpace the industry average with new product innovation & expanded channel partnerships in good progress E-COMMERCE PARTNERSHIPS & DIGITAL 3 Partnerships Industry Thailand Steady growth in the medium to long term, modest growth is likely in 2016 due to the weak economy Tune Protect Thailand (TIPCL) Continue to focus on core segment e.g. travel, corporate & direct remain key profit contributors Partnerships/exploring partnerships with - Airlines companies, travel related providers - Mobile telecommunications service provider Digital & Direct Launch additional B2C products (e.g Home Content & PA) via Direct-to-Consumer website Build brand awareness & drive traffic & sales via continuous marketing campaigns

8 8 AGENDA 01 EXECUTIVE SUMMARY Key highlights 2QFY16 Financial Highlights 1HFY16 Financial Highlights Key Strategies Outlook 02 & FINANCIAL PERFORMANCE Group Global Travel PA Reinsurance General Insurance (Tune Protect Malaysia - TIMB) Overseas Ventures 03 APPENDICES Other Financial Indicators

9 Tune Protect Group - Financial Snapshot 9 Tune Protect Group (Consolidated) Q Q Q2 vs Q2 (%) 1H H H vs 1H (%) (in RM 000) A B A vs. B C D C vs. D INCOME STATEMENT Gross Written Premiums 111, , % 264, , % Operating Revenue 125, , % 255, , % Gross Earned Premiums 116, , % 239, , % Investment Income 9,155 5, % 15,385 11, % Investment Income (excluding MMIP) 6,386 5, % 12,616 11, % Refer page 17 Refer page 20 Net Earned Premiums 82,884 71, % 165, , % Net Fees & Commission (15,298) (11,017) 38.9% (27,228) (23,163) 17.5% Net Claims (16,072) (26,337) -39.0% (44,947) (52,557) -14.5% Management Expenses (27,596) (22,160) 24.5% (48,780) (40,680) 19.9% Underwriting Profit 23,918 11, % 44,568 20, % Share of results of JV % % Share of results of associates % 2,135 1, % Profit Ater Tax 29,637 17, % 53,920 34, % Basic EPS (sen) % % KEY RATIOS Operating Ratios Net commission ratio (%) 18.5% 15.5% 3.0% 16.4% 16.9% -0.5% Net claim incurred ratio (%) 19.4% 37.0% -17.6% 27.2% 38.3% -11.1% Management expenses ratio (%) 33.3% 31.2% 2.1% 29.5% 29.7% -0.2% Combined ratio (%) 71.2% 83.7% -12.5% 73.1% 84.9% -11.8% Refer page 19 Refer page 18 Other Operating Ratios ROE (annualised) 23.4% 15.2% 8.2% 21.3% 15.2% 6.1% ROA (annualised) 9.4% 5.5% 3.9% 8.5% 5.5% 3.0%

10 10 Global Travel PA Reinsurance 1HFY16: RM 31.2 mil recorded in PAT mainly driven by NEP growth of 9% coupled with improvement in combined ratio of 3% Gross Written Premium Net Earned Premium 32.3m -1% yoy 68.1 m 5% yoy 31.3 m 4% yoy 65.2 m 9% yoy (GWP includes AirAsia, Cebu Pacific, Air Arabia & Cozmo) 2QFY16 vs 2QFY15: Flat GWP growth mainly attributed to higher GWP recorded in the middle east moderated by lower GWP in Thailand & Malaysia vs 1H2015: GWP growth of 5% mainly driven by the increase in Malaysia, EMEIA & Cebu Profit After Tax 2QFY16 vs 2QFY15: NEP growth of 4% mainly underpinned by lower strain ofupr of RM 1.2 mil vs 1H2015: NEP growth of 9% mainly attributed to lower strain ofupr of RM 2 mil Underwriting Profit 14.5 m 3% yoy 31.2 m 7% yoy 13.1 m -2 % yoy 31.6 m 15% yoy 2QFY16 vs 2QFY15: PAT growth of 3% mainly driven by higher NEP & Forex gain of RM0.5 mil vs 1H2015: 7% PAT growth supported by higher NEP & investment income of RM0.3m 2QFY16 vs 2QFY15: Flat underwriting profit mainly due to marginal higher ME despite growth in NEP of 4% vs 1H2015: Higher underwriting profit of 15% as a result of higher NEP

11 11 Global Travel PA Reinsurance Total Policies Issued Total Policies Issued China 6% (6%) Singapore 4% (4%) 8% (7%) Malaysia 55% (55%) China 6% (5%) Singapore 4% (4%) 8% (7%) Malaysia 53% (55%) Indonesia 8% (9%) ASIA 2Q 2016* Indonesia 8% (9%) ASIA 1H 2016* Thailand 19% (19%) Thailand 21% (20%) * sold via AirAsia & Cebu Pacific 1.71 million in 2Q FY 2016 (vs million in 2Q FY 2015) * sold via AirAsia & Cebu Pacific 3.72 million in 1H FY 2016 (vs million in 1H FY 2015) Composition 2Q2015 Composition Composition 1H2015 Composition

12 12 Global Travel PA Reinsurance Total Policies Earned Total Policies Earned China 5% (5%) Singapore 4% (4%) 9% (7%) Malaysia 54% (55%) China 6% (6%) Singapore 4% (4%) 8% (7%) Malaysia 52% (54%) Indonesia 8% (9%) ASIA 2Q 2016* Indonesia 8% (9%) ASIA 1H 2016* Thailand 20% (20%) Thailand 22% (20%) * sold via AirAsia & Cebu Pacific 1.73 million in 2Q FY 2016 (vs million in 2Q FY 2015) Composition 2Q2015 Composition * sold via AirAsia & Cebu Pacific 3.71 million in 1H FY 2016 (vs million in 1H FY 2015) Composition 1H2015 Composition

13 13 Tune Protect Malaysia (TIMB) 1HFY16: RM28.6 mil recorded in PAT primarily due NEP growth of 29.8% coupled with our share of MMIP PAT of RM12 mil Gross Written Premium Net Earned Premium 95.8 m -19.6% yoy m 6.4% yoy 51.6 m 26.3% yoy m 29.8% yoy 2QFY16 vs 2QFY15: Lower GWP growth mainly attributed to fire, medical (foreign workers) & offshore classes of business due to timing difference in issuance of policies to some corporate clients following the implementation of GST in April 15 vs 1H2015: GWP growth of 6.4% mainly supported by the increase in fire & motor classes of business Profit After Tax 2QFY16 vs 2QFY15: NEP growth of 26.3% mainly underpinned by the increase in motor and other classes of business vs 1H2015: NEP growth of 29.8% mainly driven by the increase in motor, medical (foreign workers), fire, engineering and marine class of businesses Underwriting Profit (including MMIP) 18.7 m >100% yoy 28.6 m >100% yoy 16.9 m 23.7 m >100% yoy >100% yoy 2QFY16 vs 2QFY15: RM18.7 mil recorded in Q2FY16 mainly supported by NEP growth of 26.3% and our share of MMIP PAT of RM12 mil vs 1H2015: RM28.6 mil recorded in H1FY16 mainly driven by NEP growth of 29.8% and our share of MMIP PAT of RM12 mil recorded in Q2FY16 2QFY16 vs 2QFY15: RM16.9 mil recorded in Q2FY16 mainly supported by NEP growth of 26.3% coupled with the improvement in claims as a result of release of claims liabilities due to our share from MMIP vs 1H2015: RM23.7 mil recorded is mainly due to NEP growth of 29.8% coupled with the improvement in claims as a result of release of claims liabilities due to our share from MMIP

14 14 Malaysia Tune Protect (TIMB) Malaysia (TIMB) GWP by Portfolio Mix Motor 38.1% (23.7%) Motor 30.0% (25.6%) Fire 12.3% (19.4%) GWP 2Q 2016 Marine 9.1% (12.2%) Fire 17.9% (16.4%) GWP 1H 2016 Marine 13.4% (13.2%) Misc 11.2% (11.4%) Misc 12.0% (12.6%) TPA, PA & Medical 29.3% (33.3%) TPA, PA & Medical 26.7% (32.2%) Composition 2Q2015 Composition Composition 1H2015 Composition

15 15 Overseas Ventures 1HFY16: Strong performance recorded in Thailand with double growth in PAT, Middle East performance remains steady Tune Protect UAE (TPCB) Gross Written Premium (100%) (RM) Profit After Tax (49%) (RM) 3.7m 63.5% yoy 6.2m 48.6% yoy 0.1m 5.8% yoy 0.2m 2% yoy 2QFY16 vs 2QFY15: GWP growth of 63.5% underpinned by continuous business growth vs 1H2015: GWP growth of 48.6% supported by continuous business expansion with new markets launched (Saudi, Georgia & Jordan) & B2B channel 2QFY16 vs 2QFY15: PAT growth of 5.8% driven by GWP growth partially offset by higher UPR strain of RM0.3 mil in line with business expansion vs 1H2015: PAT growth of 2% attributed to GWP growth partially offset by higher UPR strain of RM0.3 mil Tune Protect Thailand (TIPCL) Gross Written Premium (100%) (RM) Profit After Tax (49%) (RM) 10.1m -24.9% yoy 22.9 m 2.3% yoy 0.7m 79.2% yoy 2.1m 99.5% yoy 2QFY16 vs 2QFY15: Lower GWP growth mainly due to rebalancing & re-focusing on core segments by terminating the non-profitable segments (e.g motor compulsory and Rice) vs 1H2015: GWP growth of 2.3% mainly supported by the growth of the existing businesses (e.g travel, PA & motor voluntary) 2QFY16 vs 2QFY15: PAT growth of 79.2% mainly attributed to NEP growth and improvement in ME as a result of lower marketing & advertising expenses vs 1H2015: PAT growth of 99.5% mainly driven by NEP growth and improvement in ME

16 16 AGENDA 01 EXECUTIVE SUMMARY Key highlights 2QFY16 Financial Highlights 1HFY16 Financial Highlights Key Strategies Outlook 02 & FINANCIAL PERFORMANCE Group Global Travel PA Reinsurance General Insurance (Tune Protect Malaysia - TIMB) Overseas Ventures 03 APPENDICES Other Financial Indicators

17 17 Tune Protect Group - Operating Revenue RM mil Operating Revenue RM mil Gross Written Premium H2015 Q2FY15 Q2FY16 1H2015 Q2FY15 Q2FY16 RM mil Net Earned Premiums Investment Income ** RM mil TIMB Global Travel 56.4% 60.6% 43.6% 39.4% 57.5% 62.2% 42.5% 37.8% 1H2015 Q2FY15 Q2FY H2015 Q2FY15 Q2FY16 ** Excluding share of MMIP investment income

18 18 Tune Protect Group Combined Ratio Combined ratio 2 (%) Commission (%) 84.9% 73.1% 83.7% 71.2% 74.9% 84.9% 16.9% 15.5% 17.6% 16.4% 14.4% 18.5% Net claim (%) 38.3% 27.2% 37.0% 19.4% 34.9% 40.2% ME 1 (%) 29.7% 29.5% 31.2% 33.3% 25.6% 27.1% 1H2015 Q2FY15 Q2FY16 Q1FY Management Expense divided by Net Earned Premiums 2 Sum of Net Claims, Management Expenses & Net Fees and Commissions divided by Net Earned Premiums 1HFY16 Vs 1HFY15 refer to page 5 for explanation Q2FY16 Vs Q2FY15 Refer to page 4 for explanation Q2FY16 vs Q1FY16 decrease of 3.7% in combined ratio mainly underpinned by decrease of RM12.8 mil in net claim amount recorded in TIMB partially attributed to release of claims liabilities due to our share from MMIP

19 19 Tune Protect Group Profit After Tax PAT RM mil H2015 Q2FY15 Q2FY16 Q1FY16 FY2015 vs 1H2015 Refer to page 5 for explanation Q2FY16 vs Q2FY15 Refer to page 4 for explanation Q2FY16 vs Q1FY % growth in PAT mainly driven by RM8.9 mil increase in TIMB profit partially supported by NEP growth of 6% coupled with our share of MMIP PAT of RM12 mil

20 20 Tune Protect Group - Investment Portfolio Portfolio Mix (30 June 2016) Investment Income ** Deposits with FI* RM mil 69.4% Debt securities 20.2% Loans 0.1% Unit and property trust funds Tune Protect Group mil 10.3% % 1H2015 2Q2015 ** Excluding share of MMIP investment income Investment Yield # 2.0% 2.1% * 1.0% * 1.1% 1H2015 2QFY15 2QFY16 * Comprises of wholesale funds from the subsidiaries * Investment yield for 3 months # Investment income (include rental income & exclude share of MMIP investment income) /(total investment+ total investment property)

21 21 Travel Global Business Travel PA Reinsurance ASIA * ASIA * Singapore 4% (4%) Indonesia 8% (9%) China 5% (5%) 9% (7%) Policies Earned Malaysia 54% (55%) Singapore 4% (4%) Indonesia 8% (9%) China 6% (6%) 8% (7%) Malaysia 52% (54%) Indonesia 8% (9%) China 6% (6%) Singapore 4% (4%) 8% (7%) Policies Issued Malaysia 55% (55%) China 6% (5%) Singapore 4% (4%) Indonesia 8% (9%) 8% (7%) Q2 1H Q2 1H Malaysia 53% (55%) Thailand 20% (20%) Thailand 22% (20%) Thailand 19% (19%) Thailand 21% (20%) 1.73 million in Q (vs million in Q million in 1H 2016 (vs million 1H 2015) 1.71 million in Q (vs million in Q2 2015) 3.72 million in 1H 2016 (vs million in 1H 2015) MENA & EU^ MENA & EU^ 33% (13%) U.A.E 41% (52%) 32% (13%) U.A.E 41% (54%) 33% (14%) U.A.E 42% (51%) 32% (13%) U.A.E 41% (53%) Europe 5% (5%) Egypt 3% (5%) Morocco 9% (9%) Q2 1H Q2 1H 56.1 K in Q (vs K Q2 2015) India 9% (16%) Europe 4% (4%) Egypt 3% (5%) Morocco 9% (9%) K in 1H 2016 (vs K 1H 2015) India 11% (15%) Europe 5% (5%) Egypt 3% (6%) Morocco 8% (9%) 64.3 K in Q (vs K in Q2 2015) India 9% (15%) Europe 5% (5%) Egypt 3% (5%) Morocco 9% (9%) K in 1H 2016 (vs K in 1H 2015) India 10% (15%) ^ sold via AirArabia & Cozmo * sold via AirAsia & Cebu Pacific

22 Disclaimer 22 This presentation has been prepared by Tune Protect Group Berhad (formerly known as Tune Ins Holdings Berhad) ( Company ) in connection with the Interim Financial Statements (unaudited) for the financial period ended 30 June 2016 and announced by the Company on the Main Market of Bursa Malaysia Securities Berhad on 19 August 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.