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  wsb_investor Allianz never rely on online sales (they should), and typically people that renew online will buy direct (-10%) instead of through MYEG (without reduction of comm). 24/11/2021 2:59 PM wsb_investor https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/pdf/investor-updates/2021/2021_Q3_AMB_Analyst_Briefing.pdf 24/11/2021 7:07 PM  Papayashot Hi, can anyone pls advise on the investment holding segment of Allianz Malaysia? Investment income 3 million, but PBT is -11.9mil !! I think this is the highest recorded loss before tax reported for investment holding segment of AMB since the past 8 quarters. The Management told that it is due to larger management expenses. Can anyone please explain how they work out the figure? Any impact of IFRS17 on this segment? 24/11/2021 7:45 PM Papayashot hi wsb_investor, may I know why the investment holding segment keep on making loss all this while? For this quarter, the loss even worsen to 11 mil. 24/11/2021 10:01 PM observatory I also want to understand the significance of investment holding segment. Meanwhile a few notes and questions on the life insurance segment. Market share in 3M21, 6M21 and 9M21 has grown from 8.8%, 9.0% to 9.2% ANP increased by 32.0%. Investment-linked ANP increased by 42.2% --> Are investment-linked products more profitable? Does it mean more profitable products are growing faster? Quarterly NBV (RM million): 1Q20 50.1 2Q20 35.0 3Q20 80.8 4Q40 73.1 1Q21 82.6 2Q21 63.9 3Q21 66.0 Can we say the NBV result is good considering it has grown QoQ despite 3Q21 was a lockdown quarter? Besides 9M21 NBV at RM212.5 million versus 9M20 at RM 165.9 million means a 28% YoY growth. If the post lockdown 4Q21 can deliver stronger growth, may be we can see 2021 NBV touching RM300 million? If apply the Allianz Ayudhya example shared by wsb_investor earlier, at 10X multiplier that will contribute ~RM3 billion market cap versus current MC at ~RM4.5 billion (inclusive of ICPS) 25/11/2021 12:21 AM Papayashot Hi observatory, I am wondering, what's the use of all this growing ANP and NBV of Life Segment, and meanwhile all the life's profit is dragged by the fluctuating bond interest % (fair value loss)? I am bit puzzled in fact. Reporting increasing premium y-o-y, but once interest % goes up, all the profit masuk longkang.. What's the rationale behind all this number game and I am wondering whether there is a more effective way to understand the whole picture on whether an insurance company is doing well or not? 25/11/2021 1:08 AM wsb_investor Yup, GI book value of 3b (before multiplier), Life EV of 3.3b and Life NBV of ~300m (before multiplier), get the market average multiplier and do the math. 25/11/2021 9:36 AM observatory @Papayashot, I’m not too concerned about fair value changes due to large swing in bond yield. Looking at historical record, drastic changes in bond yield is not a regular phenomenon (hopefully not!) https://www.marketwatch.com/investing/bond/ambmkmy-10y/charts?countrycode=bx&mod=mw_quote_tab Besides, I think it was explained here before that interest rate changes also have an offsetting effect on liability. Just that I don’t know how to pin point the change in the liability side. Can anyone elaborate on that? I like to think NBV as addition of future profits to the "profit reservoir". So it's important. Of course these future profits are calculated by actuarists based on methodology and their assumptions. Not sure if BNM dictates the parameters in NBV computation. But Allianz being a subsidiary of Allianz SE it believe has to follow its parent’s way, and somehow comply to a “global standard”? Just wonder historically how often that insurance firms find their calculations made by actuarists in an earlier age turn out to be very different at a later age. Any such example @wsb_investor? 25/11/2021 9:37 AM wsb_investor Under/overstatement of EV/NBV very unlikely for MNC like AIA, Pru, Allianz. 25/11/2021 10:12 AM observatory @wsb_investor, it seems that paying too much attention to life insurance quarterly core PBT could be a distraction. Not to mention PBT that incorporates fluctuation in investment gain/ loss. Would you agree with this view? My reasoning is this. On the revenue side, other than single premium products (account for only 17% of GWP in 9M21), other policies have been written years before. Their quarterly revenue contribution should be predictable right? For example, ALIM quarterly gross earned premium for the last 4 quarters are within the range of RM753m to RM826m, a variation of less than 10%. I suppose on the cost side they are exposed to the rise and fall of claims, management expenses etc. Core PBT in the last 4 quarters vary between RM43m and RM69m. However the quarterly cost are rather stable in the low RM700 million range. The seemingly larger swing in core PBT is due to the relatively thin (<10%) PBT margin. When you look at the life insurance core PBT, what are the factors you will look at to gauge the performance? 25/11/2021 4:32 PM wsb_investor No one will care about PBT margin, that doesn't reflect anything remotely close with how life insurance operates, and hence this PBT margin will be gone in IFRS17. For core PBT, yes that will be helpful, however as mentioned before, new business sold will incur losses in early period. Say a profit pattern of -100, 20, 20, 20, 20, 20, 20...., stack up for multiple years of new business, it will be -100, -80, -60, -40, -20, 0, 20, 40, 60, 80..... Say on the year where the profit = 60, the profit coming from existing block is actually 160, but drag down to 60 due to first year acquisition cost of new business. This is still on the assumption that new business volume doesn't increase. In reality, new business typically grow with 10% a year. 25/11/2021 10:31 PM Papayashot Hi wsb_investor, under IFRS17, new business sold in early period still considered loss ah? 25/11/2021 10:40 PM observatory @wsb_investor, thank you for the explanation. Based on what you've said, IFRS17 should have been implemented long ago. It will save everyone from major misunderstanding. For example Affin assigned a RM8.4 TP to STMB in late 2019 based on 4.75X book value. Now it's RM3.8. Despite the pandemic the impact to insurance sector isn't that great. May be this can explain the constant share disposal by STMB insiders! 26/11/2021 12:29 PM observatory @Papayashot, I only have a basic understanding that Core PBT = PBT - fair value effects - tax impact. The result is presented this way in page 7 and 8 of analyst briefing slides. Not sure about the detailed calculation. 27/11/2021 12:20 PM wsb_investor The fair value you typically saw in analyst briefing slides coming from the assets side. For core PBT, some insurers (not sure with allianz) will assume a long term interest rate/no change in interest rate when calculate the liability. The impact is generally relatively minimal. 27/11/2021 4:51 PM Papayashot hi @wsb_investor, rgd. the impact of covid on Allianz Malaysia's business, am I right to say that the impact is not so much as the net earned premum is still increasing despite covid? From what I observed (pls correct me if I am wrong), the main reason the profit is dragged is the fair value loss in Life segment. So, can I say that their investment team is not doing a good job in this regard (buy bond at wrong timing)? Nothing to do with covid I believe? 11/12/2021 3:49 PM observatory I come across this advertisement by Allianz General. There is a section talking about its stance on online sales. ***** This coming year, Wang says Allianz General will continue to use Covid-19 as a backdrop to design its products and listen very carefully to the voices on the ground to ensure it produces the right kind of solutions. The one thing it won’t do, he says, is sell them directly to customers online. While it has over 40 digital partners, the insurer still prefers a hybrid business model that sees its agents personally dealing with customers. That might sound unusual in a time where businesses are increasingly digitalising their products and services. Wang explains that this is because he is not convinced that the company can be as effective at delivering its services via an online portal. “You can get a quote and key in some details; it’s just that the last mile of buying, you can’t buy. I want to route you to our intermediaries so that they can provide you with the service. As a responsible insurance company, we don’t want to get a whole bunch of customers that I don’t even know how to service — that’s not our business model,” he stresses ***** Despite what the new CEO has said about online sales, I suspect the main reason is the company does not want to alienate its agents. Does it mean other players selling direct to customers can eventually eat into its market share through the offering of more competitive products? 17/12/2021 1:03 PM masterus https://www.malaymail.com/news/money/2021/12/25/allianz-malaysia-wins-the-edge-billion-ringgit-club-award-for-highest-growt/2031029 27/12/2021 10:42 AM masterus Pasti untung counter ini. Apa apa pun naik. Nanti cakap ekonomi tidak baik, fee nya naik dan premium pun naik. Pasti untung punya 27/12/2021 10:53 AM observatory "General insurance industry facing up to RM3 billion in flood-related claims, says PIAM" https://www.theedgemarkets.com/article/general-insurance-industry-facing-rm3-billion-floodrelated-claims-says-piam Let's do a back of the envelope calculation on Allianz General's exposure. (1) PIAM estimated RM2 billion to RM3 billion exposure. Let's take the average RM2.5 billion. (2) Allianz General has about 13% of market share. For simplicity, let's assume uniform exposure across different insurance types like motor, fire... Allianz General's exposure will be RM2.5 billion * 13% = RM325 million. (3) During FY2020, gross premium of Allianz General is RM2,356 million. Premium ceded to reinsurers was RM363 million, or about 15% of gross premium. (4) I'm not familiar with how reinsurance works. In the case of recent flood, does reinsurance pays out when a certain claim threshold is reached? Not knowing how it works, I will make the assumption that Allianz General and reinsurers will shoulder the claims on 50-50 basis. Allianz is expected to shoulder RM325 million *0.5 = RM163 million. (5) The PBT for Allianz General in FY2020 was RM432 million. Assuming it remains the same, an extra 163 million payout represents 38% reduction in PBT. Any thought? 29/12/2021 10:33 PM wsb_investor there can be multiple reinsurance arrangements. for flood, very likely the arrangement is reinsurer will absorb all losses above a certain threshold. 30/12/2021 11:51 AM observatory Good input. Can we expect the company to make provision in next quarterly report? Based on the amount we can perhaps get a glimpse of Allianz General's risk tolerance, on how much they are willing to cede to reinsurers to protect downside (besides the info on 15% gross premium). 31/12/2021 10:54 AM wsb_investor definitely will have provision. can expect Allianz to have a much lower profit (maybe even losses) from GI for Q4. but who knows, Allianz only serves rich customers, and maybe only a few affected. Poor people typically under insured. 31/12/2021 9:00 PM  Trade in Peace 长期多头，这里是support支撑位置，守住前低都可以继续持有喔，是很有机会的一档股票 https://www.youtube.com/watch?v=voWmOcBQyb4 03/01/2022 4:03 AM observatory During the past 5 years dividends were announced in January. https://www.bursamalaysia.com/market_information/announcements/company_announcement?keyword=&cat=EA%2CENCO&sub_type=&company=1163&mkt=&alph=&sec=&subsec=&dt_ht=&dt_lt= 08/01/2022 9:47 AM kywoo I expected a dividend range of 56 sens to 60 sens. I was totally taken by surprise when 2 hours ago they announced 63 sens. I must say it is a very generous dividend considering a difficult insurance market in 2021. 10/01/2022 8:15 PM wsb_investor Insurance market is not difficult yet, Malaysia still in honeymoon phase (for life). This 63 sens dividend sort of indicated that Allianz is very well protected by reinsurance for its flood losses. 10/01/2022 8:58 PM sheldon Going through the prospectus for ICP, it appears to me that the ICP should be trading at a higher price relative to the ordinary shares. Any reason for the anomaly? 13/01/2022 10:45 AM observatory Based on valuation methods like dividend yield or dividend discount model, it should enjoy a premium. However the trading volume is thin. Any fund will take a long time to acquire or dispose a meaningful position. And the market price will move against it during the acquisition/ disposal. From that perspective it should suffer a discount for being illiquid. The net result is market price fluctuates between a small premium to a small discount, reflecting the relative strengths of these two forces. But for individual investors who have strong conviction and plan to hold forever (ok some exaggeration here), holding preference share makes sense. 13/01/2022 8:43 PM sheldon Tq observatory. So it's the trading volume is the setback. I made my maiden purchase of ICPs today & I'm exploring an arbitrage of sorts between ordinary & ICP 13/01/2022 10:23 PM wsb_investor the gap is never more than 1%, even if you sell after dividend, pocket the additional ~1% dividend, so much effort for so little return? not completely risk free either. 13/01/2022 11:22 PM sheldon wsb_investor - Dividend rate is 20% more. My somewhat simpleton mind tells me that holding ICP in the long run, I'll have more cash in my bank than holding ordinary equivalent. In return I just have to make a small sacrifice on trading liquidity. Is this logical? 14/01/2022 10:11 AM wsb_investor The current dividend yield is ~4.7%, so with ICP u getting ~0.9% more, assume price gap no change, and 0 fee, you can pocket this 0.9%. but in reality, no, just not worth any efforts. 14/01/2022 10:29 AM sheldon TQ wsb_investor - 0.9% more stirs my interest. I sold some of my in-the-money ordinary & withdrew some of my pathetic-yielding FDs & piled them on ICPs. I can smell the dividends & only hope for an upward drift thereafter. 14/01/2022 5:10 PM observatory "The floods that hit the country recently resulted in losses amounting to between RM5.3 billion and RM6.5 billion, said economic affairs minister Mustapa Mohamed. He said losses to property amounted to between RM1.2 billion and RM1.4 billion, followed by damage to vehicles, estimated at RM1 billion to RM1.3 billion. Mustapa said the manufacturing sector suffered losses of between RM800 million and RM1 billion, and the agriculture sector between RM40.9 million and RM 49.9 million. Meanwhile, losses to public assets and infrastructure amounted to RM2 billion, and those suffered by business premises were estimated at RM500 million to RM600 million." https://www.freemalaysiatoday.com/category/nation/2022/01/17/up-to-rm6-5bil-losses-due-to-floods-says-mustapa/ Recall earlier PIAM estimated the industry's exposure at RM2b to RM3b. Recently an analyst put Allianz's gross and net exposure at RM300m and RM50m respectively. Not sure about the basis of the estimate, but judging from the minister's figures on vehicle damage alone and Allianz's market share, the gross exposure may be lower. 18/01/2022 10:21 AM wsb_investor PIAM is deliberating a proposal to make it compulsory for motorists to have such insurance (flood) coverage. 19/01/2022 11:22 AM Papayashot As flood is common nowadays, may I know how an insurer could still ensure they make profit if flood insurance is sold? 19/01/2022 12:11 PM wsb_investor GI will play the long term game, if accumulated floor insurance is a loss (after reinsurance), the future floor insurance premium will increase to recoup back previous losses. Looking at flood insurance alone, over say 20 years horizon, sure need to be profitable to ensure long term sustainability. 19/01/2022 2:27 PM observatory @wsb_investor, it's the estimate from TA Securities. https://www.thestar.com.my/business/business-news/2022/01/14/ta-securities-retains-overweight-on-insurance-sector 24/01/2022 5:06 PM gemfinder Sold 13.06 today open. Add back 58 sen n 63sen dividen. Stil gain rm200. Consider lucky 27/01/2022 9:57 PM  | |
