KUALA LUMPUR: Tune Protect Group Berhad’s financial results for the second quarter of the financial year 2024 (2Q24) were affected by one-off impairments from the Group’s subsidiary Tune Protect Ventures (TPV) and its associate company, Tune Protect Thailand (TPT), and abnormally high fire losses.
Insurance revenue also declined 6.7% year-on-year (YoY) which led to a Loss Before Tax (LBT) of RM10.3 million.
How Kim Lian Tune Protect Group CEO How Kim Lian said: “The Group’s profitability was impacted by the one-off impairments from TPV of RM3.0 million, as well TPT of RM4.9 million. Our net claims incurred was also higher as we experienced two abnormally large fire losses in 2Q24, in contrary to 2Q23 where we had benefitted from the better than anticipated claims experience from the Tenang Personal Acccident (Tenang PA) scheme, which had since been discontinued.”
Consequently, the Group’s combined ratio increased 9.9% YoY due to the higher net incurred claims and attributable expenses. Increased acquisition cost ratio also contributed to the increase in the Group’s combined ratio, partially offset by a lower reinsurance ratio.
“The lower reinsurance ratio was due to the Group’s gradual exit from the Large Industrial Risk business leading to savings in reinsurance premiums. If we were to remove the anomalies mentioned above from the equation, overall, the Group would have recorded a slight Profit Before Tax (PBT) of RM1.5 million,” said How.
The Group maintains a conservative investment strategy while looking for opportunities to enhance its overall investment returns. Moving forward, it plans to progressively increase its investment into Low Risk Unit Trust Funds, with underlying investment predominantly in Malaysian Government Securities, Government Investment Issues, and Government Guaranteed Corporate Bonds.
“The Group’s investment performance in 1H24 has been stable and we expect more of the same in 2H24. We will be rebalancing some of our money market or fixed deposits into Malaysian government guaranteed bond funds where we are aiming for a reallocation mix of 2% in deposits and 98% in low-risk unit trust funds by the end of 2024,” said How.
The Group is reprioritising its efforts in the Travel segment with various initiatives in key growth areas such as championing the regional travel ecosystem. For example, it is focused on increasing take-up rate (TUR) through existing distribution channels, such as AirAsia.
“Through in-depth analysis on our current Travel business, we acknowledge that more can still be done to address the gaps in the take-up rate for the Group’s airline business such as AirAsia. Now that we’ve seen where the gaps are, we will be actively rolling out various initiatives to increase the take up rate and grow our Travel business further,” said How.
With the travel and tourism sector showing robust resurgence to pre-pandemic levels of 2019, as well as the Group's ongoing efforts in leveraging the Travel ecosystem in the region, the Group is optimistic that the travel insurance products will continue to grow positively in the coming quarters.
“The Group has reviewed its portfolio and will focus on the more profitable segments of the business while maintaining cost discipline to ensure favourable underwriting results in upcoming quarters. We remain cautiously optimistic that our business strategies and capital strength will continue to fuel growth for the Group over the medium to longer term,” How concluded.
