Allianz aims for more share

Insurer to gain from tariff liberalisation

PETALING JAYA: Allianz Malaysia Bhd, which raked in a higher net profit in the first quarter of the year, aims to strengthen its life and general insurance businesses as the subsidiary of the German insurer gears up to increase its market share amid stiff competition in the insurance industry, say analysts.

Subject to unforeseeable events, the group’s premiums for its general and life businesses could outpace industry growth this year.

AmInvestment Bank Research analyst Kelvin Ong, who is maintaining a “buy” call on Allianz Malaysia, said he continued to like the company for its strong market share in the general and life insurance businesses.

“As the largest general insurer domestically, it is envisaged that the group will be able to withstand competition in the general insurance industry, moving forward, from further liberalisation of motor and fire tariffs.

“We do not expect the group’s life insurance business to be significantly impacted by global accounting standards FRS 17, which will be implemented on Jan 1, 2023.

“This is in view of Allianz Life Insurance Malaysia’s (Alim) stronger focus on investment-linked (IL) products which provide higher margins.

“Any stronger growth in new IL premiums is poised to lift the life business’s embedded value and this will be positive for the stock’s valuation,” Ong added.

Allianz Malaysia, a subsidiary of Allianz SE, has two insurance subsidiaries – Allianz General Insurance Company and Alim.

The group’s net profit surged to RM101.32mil in the first quarter ended March 31, 2022 and revenue for the quarter also increased to RM1.71bil.

Allianz Malaysia CEO Sean Wang said the group would continue to find ways to remain agile in driving business and profitability, innovate and accelerate transformation to stay ahead of the game.

The group recorded total gross written premiums (GWP) of RM1.62bil for the first quarter, a 9.5% increase from RM1.48bil in the same period last year, while its total assets grew by 10.2% to RM23.92bil for the first three months of 2022 compared with RM21.71bil last year.

RHB Research, which is also maintaining a “buy” call on the stock, said that it understands that Allianz Malaysia planned to strengthen its agency distribution channel for Alim, while remaining focused on higher-margin IL products.

“GWP’s growth for both the general insurance and life insurance segments was healthy despite some weakness,” it noted.

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