Journey to Wealth
Insurance - Key Points In BNM, IMF Reports
The insurance and takaful industry saw a boost in profitability in 2012, spurred by improving premiums growth and healthier combined ratios in the general insurance/takaful sectors. Despite notable increases in equity exposure and concerns on interest rate risk, insurers' risk exposure remains reasonable. BNM intends to tighten scrutiny of the insurance/takaful industry, as recommended by the IMF Country Report. We remain NEUTRAL on the sector.
Better 2012. The life insurance and family takaful sector reported a 38.2% increase in net income or excess income over outgo, backed by premiums/contributions growth of 11.2%. Meanwhile, the general insurance and takaful segment's operating profits surged by 72.6% to RM2.9bn on the back of premiums/contributions growth of 11.1%. The general insurance and takaful industry also benefited from a low combined ratio of 96.9% (vs 104.7% in 2011).
Regulations tighten their grip. The industry's capital adequacy ratios (CAR) leveled at 222.3% (vs 222.5% in 2011), well above Bank Negara Malaysia (BNM)'s supervisory target capital level (STCL) requirement of 130%. The IMF Country Report acknowledges the strength and comprehensiveness of the local insurance regulatory measures versus the international framework. Meanwhile, the country's cross-border operations are still small relative to the industry, which we believe may have prompted BNM to relax cross-border financial activities for resident insurers and takaful operators. The central bank intends to enhance the existing prudential requirements with the Financial Services Act (FSA), as well as other measures which may include containment of systemic risks and cross-border risks. This should boost the sustainability of the industry, which being liberalised.
NEUTRAL. We retain NEUTRAL on the sector, with our Top Picks being Syarikat Takaful for its exposure to the takaful industry, and LPI Capital for its robust business model and solid underwriting strength.
Source: RHB
More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Get Your NVDA Share by Opening a Moomoo Account*!
Apps
Top Articles
1
Follow Kim's Stockwatch!
THIS STOCK READY TO SKYROCKET!!! - THE POWER & WATER SUPPLY SERVICES
2
Mercury Securities Research
3
Follow Kim's Stockwatch!
THIS ANOTHER GEMS READY TO SKYROCKET!!! - MAJOR DEVELOPER IN PENANG
4
5
BFM Podcast
6
博傻理论
7
8
AmInvest Research Reports
TRANSPORTATION & LOGISTICS - Our View on of Air Asia’s Restructuring
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
MQ Trading Signals
Stock
Time
Signal
Duration
Stock
Time
Signal
Duration
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
