Tune Protect still pursuing tie-up plan in Indonesia

Razman Hafidz Abu Zarim is new CEO of Tune Protect Group Bh

PETALING JAYA: Tune Protect Group Bhd is still actively pursuing a joint venture (JV) plan in Indonesia and hopes to announce details of the tie-up by this year.

Group chief executive officer Razman Hafidz Abu Zarim said the insurance company is currently talking to several parties to ensure that the JV this time would materialise with the right partner.

“We are still actively pursuing to form a JV in Indonesia. As you know, the Indonesian market is a tough one to penetrate due to its regulatory issues.

“We are looking for an insurance entity that would benefit both parties,” Razman told reporters on the sidelines of Tune Protect’s AGM yesterday.

The group had previously aborted two deals in Indonesia involving the acquisition of two general insurers.

As announced earlier, the group expects the Indonesian acquisition to be in the range of US$10mil.

Indonesia is the third largest contributor to Tune Protect’s travel reinsurance business.

In the meantime, Tune Protect will concentrate on Asean for now and perhaps look into the Phillippines and Vietnam for further growth.

On its performance, Razman said the group expected to return to double-digit growth in gross written premiums (GWP) from financial year 2018 (FY18) onwards, driven by its recent digital transformation in collaboration with AirAsia Bhd. AirAsia holds 13.65% stake in Tune Protect.

“For 2017, we expect a single-digit growth in GWP, almost similar to 2016 level, due to short-term pains in view of the challenges and mature insurance industry.

“However, there is still a lot of potential for us to expand in the market,” Razman said, adding that of the 22 insurance players, Tune Protect’s market share stood at 5% currently.

For FY16, Tune Protect’s GWP increased by 5.7% to RM501mil, up from RM474mil in FY15.

With the ever-growing technological advancement and innovation, the insurance industry was undergoing rapid shift. This made sense for the digital tie-up with AirAsia Bhd to grow Tune Protect’s business, Razman noted.

He explained that the tie-up would see the integration of Tune Protect’s data by leveraging on AirAsia’a full-fledged data from its 400 million over customers.

“Digitalisation will also help the group reduce costs further by automating more operations and streamlining its entire process,” he noted.

Meanwhile, AirAsia group CEO Tan Sri Tony Fernandes said the digital partnership is in line with AirAsia and Tune Protect’s initiatives in pushing ahead for an Asean digital insurance company to make insurance claims, purchases and contracts easier for clients.

“The insurance rates offered via its distribution channels will be similar to AirAsia fares. The rates will change depending on destinations.

“This partnership will see an increase in Tune Protect’s market penetration and grow both AirAsia and Tune Protect’s business ancillary income,” said Tony.

Customers would also be able to purchase and claim insurance at the airport as well as when they land at their destinations, he added.