Review

• Allianz’s 9M23 net profit of RM537.2mn (+22.0% YoY) came within ours but above consensus full-year estimates at 74.5% and 106.8% respectively.

• 9M23 net profit rose 22.0% to RM537.2mn, ahead of insurance revenue growth of 11.3% to RM3.6bn. We attribute the solid performance to higher contribution from the general and life insurance segments as well as absence of Cukai Makmur. The general insurance reported higher PBT of 18.8% YoY to RM405.0mn, lifted by higher insurance service results and positive fair value movement from investment. Combined ratio decreased by 0.6 pts to 85.7% due to the lower administrative expenses.

• Meanwhile, the life insurance segment PBT increased 4.0% to RM320.0mn driven by higher net insurance and investment results. Gross written premiums (GWP) increased by 5.8% YoY, boosted by agency and employee benefit channels. More importantly, new business value stood at RM235.8mn (+3.1% YoY).

• QoQ, PBT grew 17.7% to RM262.4mn as revenue increased 12.1% to RM1.3bn. Growth mainly came from the motor business and investmentlinked protection business.

Impact

• No change to our earnings forecasts pending updates from analyst briefing.

Outlook

• Moving into 4Q23, we expect Allianz’s growth momentum to continue, anchored by resilient domestic demand. Meanwhile the repricing activities, cost containment initiatives and recruitment of second-hand car dealers will bode well for the group.

Valuation

• Reiterate Buy on Allianz with a target price of RM18.90/share based on SOP valuation.

Source: TA Research - 24 Nov 2023