PETALING JAYA: The market is bullish on insurer Allianz Malaysia Bhd
’s prospects following the release of the company’s second quarter ended June 30, 2026 (2Q26) financial results last Friday that met consensus expectations.
RHB Research, which kept a “buy” call on the stock, raised the target price (TP) to RM24.50 from RM23.90 despite maintaining earnings projections.
It said 2Q26 results met expectations, underpinned by resilient revenue growth from general and life insurance segments.
It noted that general insurance earnings were slightly dragged by lower net insurance and investment results while life insurance delivered a robust quarter with stronger insurance service and investment results.
MBSB Research raised the TP to RM26.77 from RM23.74 while maintaining a “buy” call on the stock.
The research house said that while the insurer released a decent set of financial results as forecasted, it believes claims pressure will continue to drag short-term earnings, especially since it has a large exposure to medical and motor insurance.
It said there could also be some weakness in the life insurance segment gross written premium (GWP) figures due to lower vehicle sales.
“However, we remain optimistic on overall growth prospects and expect a GWP recovery in subsequent quarters, particularly as the macroeconomic outlook remains extremely bright,” it added.
It pointed out that the life insurance segment has managed healthcare inflation very well, with its health loss ratios showing considerable improvement from last year.
“Solid take-up in co-pay products should help maintain this excellent performance.”
It added that the life insurance segment’s growth has also rapidly outpaced the rest of the industry and has been making considerable headway, particularly in the areas of bancassurance and employee benefits.
Additionally, it noted that dividend yields should remain moderate at 4% as capital constraints would likely persist given the high growth levels putting pressure on solvency.
It also said cost inflation would put pressure on both the general and life insurance segments’ claims ratio.
TA Research expects the insurer’s medical claims ratio to remain below 85% for the financial year ending Dec 31, 2026, supported by enhanced claims management capabilities and more rigorous claims assessments.
“The newly launched medical insurance products with co-payment features should also help promote a more sustainable level of medical cost inflation over the longer term.
“The insurer could benefit from the base medical health insurance takaful plan given that existing customers come mainly from upper-income brackets but may be looking for more affordable options,” it added.
It has reiterated a “buy” recommendation on the stock with an unchanged TP of RM24.35 as the insurer continues to introduce new products and promotional campaigns to address evolving consumer needs.
“Furthermore, continued investment in digital capabilities and platforms will remain crucial in enhancing technical excellence and the overall customer experience,” it said.
