INSURER Allianz Malaysia Berhad likes to keep the big picture in mind following its move to enter the underserved and often underinsured segment in a larger way.
The company, which is the leading general insurer in the country, says this is part of its plan to further increase its environmental, social, and governance (ESG) credentials and standing in the larger community.
Allianz Malaysia has since July this year launched five products as part of the Rahmah Insurance initiative.
The company says it is among the first insurance providers to launch a product that is part of this initiative by the government which aims to provide affordable insurance coverage for all Malaysians.
Its chief executive officer Sean Wang believes this could help the insurance industry appeal to a wider audience amid the persistent low insurance and takaful penetration rate in the country.
“It’s not just about the right price point for the underserved segment of society but at the same time we need to find avenues to increase the value of our insurance product to the underserved,” says Wang.
“This is the reason why we are invested in the Insurance Rahmah initiative.
“I was initially very inspired by the Rahmah RM5 meal offerings in many eateries. We have also been invited by the government to think of what we can do for the people who are suffering during these difficult economic conditions.
“We heeded this call that is tied to two national objectives together – Rahmah and Bank Negara Malaysia's call to increase insurance penetration among the population.”
While acting to help achieve national objectives, Wang notes it involves putting more resources into a market segment that offers lower margins.
“Aside from the Rahmah and BNM's objectives, this demonstrates that insurance companies are not just out to make money with our products,” Wang adds.
“We see some are struggling financially and we do not feel it is appropriate to make such high margins here for the Rahmah product offerings.
“We need to find an avenue to increase the value of the insurance product to the underserved in society and this is the reason why we have a growing presence in Rahmah despite it being a lower margins business.”
Despite the lower margins, Wang notes that Rahmah product offerings are profit marking and not an offering that's loss-making.
As part of its Insurance Rahmah offering, Allianz Malaysia announced two upgraded products in July: PerlindunganKu Allianz4All for personal accident coverage, and Allianz MotorcyclePlus for motorcycle coverage.
In September, the company rolled out the affordable insurance solutions Private Car Rahmah Package for comprehensive and TPFT (third party, fire and theft) vehicle cover, and a new life insurance product called Allianz Kasih4All.
“The idea behind this is, once a person starts consuming one Rahmah product, we believe they will start to change their perception on insurance and will consume more other insurance products.
“This increases awareness and literacy in terms of consuming general and life insurance products,” Wang says.
Allianz Malaysia has embarked on such initiatives long before these five Insurance Rahmah products.
The company had launched the Allianz KampungKu, which is a very affordable insurance plan that provides protection for kampung houses or household contents against fire, flood and windstorm risks.
Wang notes that the company launched this product in 2014 with the aim to facilitate higher understanding of insurance products among the rural populace.
“Why do we create an insurance product to cover flood for people who are in flood-prone areas to consume them? That’s because we want to teach the rural folks that if floods happen and if they have coverage, they would be compensated.
“We rolled this out in Kemaman in collaboration with the Terengganu state government at that time," Wang says.
Wang asserts that asset and life protection is a matter that needs to be given due attention by the public irrespective of how wealthy they are.
“At Allianz Malaysia, all we need to do is create the right product for people to consume so that they can take the first step towards taking responsibility for their life and assets,” he says.
Notably, one of the products under the Rahmah initiative is the Allianz Motorcycle Plus which provides coverage for motorcycles of 250cc and below, and addresses a big percentage of road users.
On the financial side of Allianz Malaysia, Allianz General continues to be the market leader, retaining it’s market share at 13.7% for the first nine months of 2023 (9M 2023) in the conventional insurance market.
The general insurance business remained focused on its multi-line businesses and multi-distribution strategies to maintain market leadership and generate growth and profitability.
Excluding business outside Malaysia, Allianz General recorded a gross written premium (GWP) growth of 11.2%, which is higher than the General Insurance industry GWP growth of 7.7% for the nine months of 2023.
In terms of distribution channel, GWP for the Group’s general insurance business in 9M 2023 continued to be driven by their agency distribution channel, which contributed 55.3% to total GWP.
This was followed by the Franchise channel, which contributed 30.7% of GWP, with growth coming mainly from Motor.
General business recorded an insurance revenue of RM2.03bil (9M 2023), an increase of 7.7% compared to the corresponding period of RM1.89bil mainly from increase in gross earned premium from motor business.
The General business segment also contributed a profit before tax of RM405mil, an increase of 18.8% (9M 2022: RM340.8mil). The increase was attributable to higher insurance service results and positive fair value movement from investment. Net combined ratio was 85.7% as at 9M 2023 (9M 2022: 86.3%).
On the life insurance side, Allianz Life Insurance Malaysia Berhad (Allianz Life) posted a Q3 insurance revenue of RM599.1mil, an increase of 28.6% or RM133.1mil compared to the preceding year’s quarter.
Year to date, the insurance revenue grew by 16.2% or RM222.2mil to a total of RM1,597.8mil.
The growth in insurance revenue is due to, among others, a solid performance from its Investment-linked protection business and Employee Benefits business.
Allianz Life also recorded a higher profit before tax of RM124.8mil, which is an increase of 38.7% compared to the preceding year’s Q3.
Profit before tax for the first nine months increase by 4% over the past year to a total of RM320mil mainly due to higher net insurance and investment results.
Allianz Life continues to strengthen distribution capabilities on all channels and to enlarge and also build a professional agency force that is adept in selling investment-linked protection products and also expand its bancassurance business through an exclusive conventional partnership tie-up with HSBC Bank Malaysia Berhad.
For more information on Allianz Malaysia insurance solutions, go to www.allianz.com.my