Allianz Malaysia posts lower 3Q net profit of RM108.56 mil on higher expenses

KUALA LUMPUR (Nov 23): Allianz Malaysia Bhd posted a lower net profit of RM108.56 million for the third quarter ended Sept 30, 2022 (3QFY22), down 5.73% from RM115.16 million in the same period a year ago, as it registered a higher management expense, as well as higher operating and tax expenses.

The drop in profit came as tax expense grew to RM57.95 million from RM43.75 million. Revenue rose 7.72% to RM1.71 billion from RM1.58 billion, mainly due to higher gross earned premiums and investment income of RM95.5 million and RM26.9 million, respectively.

Allianz’s bourse filing showed its profit before tax (PBT) for the general insurance segment slipped 2.1% to RM112.7 million from RM115.1 million, mainly contributed by higher claims. Meanwhile, the investment holding segment’s loss before tax widened to RM12.6 million from RM11.9 million, mainly on higher expenses.

Its life insurance segment, in contrast, recorded a higher PBT of RM66.4 million, up 19.2% from RM55.7 million, driven by higher contribution from its protection business.

For the nine months ended Sept 30, 2022 (9MFY22), the group’s net profit dipped 5.35% to RM306.49 million from RM323.82 million in 9MFY21, though revenue rose 6.5% to RM5.07 billion from RM4.76 billion, as it recorded a higher tax expense of RM130.45 million, versus RM108.74 million previously.

On prospects, Allianz said the last quarter of 2022 will likely continue to be challenging for both the general and life insurance segments, with ongoing supply chain disruptions, higher inflation and lower real disposable income.

“The higher inflation may impact claim costs, while lower disposable income may impact consumers’ purchasing power and spending on longer-term commitments such as insurance products,” the group said.

To remain competitive, Allianz said it will continue to execute its strategic initiatives of expanding its distribution capabilities, while also maintaining focus on product profitability.

“The group continues to make investments in talent and technology, in order to execute its strategic initiatives. The group will also focus on accelerating digital capabilities to ensure scalability as the business grows, and to create timely customer-focused solutions,” it added.

At market close on Wednesday (Nov 23), Allianz shares were down six sen or 0.65% to RM13.30, with a market capitalisation of RM2.37 billion.