ALLIANZ MALAYSIA BHD

KLSE (MYR): ALLIANZ (1163)

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Last Price

20.40

Today's Change

-0.06 (0.29%)

Day's Change

20.30 - 20.52

Trading Volume

15,800


7 people like this.

1,460 comment(s). Last comment by observatory 1 month ago

Posted by wsb_investor > 2024-04-23 09:04 | Report Abuse

technically, yes, you can do that too, but most of the time, after repricing, your total premium will increase, say to 1200 (400 to life, 800 to medical), then to 1600 (400 to life, 1200 to medical) and so on.

troy88

2,974 posts

Posted by troy88 > 2024-04-23 09:12 | Report Abuse

Recent retracement was good time to buy. Long term TP 30+ still intact..

yielder

29 posts

Posted by yielder > 2024-04-24 05:11 | Report Abuse

Heard from insider that 50% of people break the contract, as they cannot afford to continue paying the premium. Then they will get back less than half of their invested amount. I guess that's the most profitable part for the insurer?

Posted by wsb_investor > 2024-04-24 09:15 | Report Abuse

It could be true that maybe 20% people lapse the contract in first year (in this year), and probably get back less than half of initial premium paid. I don't think it will over 50%, even the most lousy tier 3 insurers also have better persistency. And no, insurers do not profit from this. BNM actually prohibits insurers to profit in this manner. Agents that "profit" from it, even if a whole life ILP only lasts for one year, the first year ~40% commission still need to pay to agents.

yielder

29 posts

Posted by yielder > 2024-04-24 11:30 | Report Abuse

wsb how is the refund calculated? if i've invested 100k, then got retrenched & need to stop the policy. do I get back 100k minus agent commission? I think there's a penalty. Do you know how much is that?

Posted by wsb_investor > 2024-04-24 11:48 | Report Abuse

Exact % varies by product, but in most case, you will not able to get back any commission paid, and some expenses incurred (typically relatively negligible, except for small ticket size policy).

yielder

29 posts

Posted by yielder > 2024-04-24 19:57 | Report Abuse

wsb if allianz were to redeem it's preference share. is it 1 pref share to 1 common share ratio? I found here, but not too sure. https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/pdf/investor-updates/2011/RightsofICPSHolder.pdf

Posted by wsb_investor > 2024-05-10 14:57 | Report Abuse

OCBC takes Great Eastern private @ S$25.60 per share, last traded price of S$18.70, embedded value per share = S$36.59.

observatory

1,059 posts

Posted by observatory > 2024-05-11 00:15 | Report Abuse

So last traded price is 0.5X EV. Privatisation offer is 0.7X EV.
But if assumptions in the EV methodology are broadly correct, rightfully the net present value of future profits should be roughly the same as the EV, even if there no more new business, right?
Was the market being too pessimistic with Great Eastern, or there are hidden risk in the EV assumptions?

Posted by wsb_investor > 2024-05-14 16:28 | Report Abuse

筹资跨足电影业
大马保险代理Norman Pang
明年新加坡上市

Posted by wsb_investor > 2024-05-14 16:30 | Report Abuse

If not mistaken, great eastern adopts a very aggressive method to calculate future profit from medical business, something like always reprice 10% annually hence the Pv profit can become very unrealistic (in my view). However, not sure how the normal retail shareholders view it, since they won't have such info.

observatory

1,059 posts

Posted by observatory > 2024-05-14 23:02 | Report Abuse

Thanks for your input.

Using today closing price, Allianz total market cap is RM7,694m.

Based on Maybank's input, the Jun 2023 general insurance equity is RM2.5b, and life insurance EV is RM3.5b.

Working backward, assume 1.4X book value for the GI business, the implied value of life business = RM7,694m – RM2.6b*1.4 = RM4,194m, or 4194/3500 = 1.2X EV

I hope Allianz EV methodology is conservative and prudent.

troy88

2,974 posts

Posted by troy88 > 2024-05-18 11:57 | Report Abuse

On track to slowly climb to eventually reach RM30+ level..

henghua

2 posts

Posted by henghua > 2024-05-18 12:31 | Report Abuse

Based on NTA of RM28.88, it’s not impossible and surprising. It’s a matter of time. Just be patient and wait.

Posted by wsb_investor > 2024-05-18 20:13 | Report Abuse

Diluted NTA is just RM14.85.
While it is possible to reach RM30, probably won't happen in 3 years time. RM25 probably max for this year.

Papayashot

380 posts

Posted by Papayashot > 2024-05-18 21:26 | Report Abuse

For IFRS17, will the bond yield fluctuation (which would cause unrealized gain/lost in bonds hold) be factored while calculating the net profit?

What is the impact of the current elevated Malaysia bond yield (as compared to covid time) to an insurance company?

Posted by wsb_investor > 2024-05-18 23:09 | Report Abuse

Yes, but less volatile vs pre IFRS17.

Short term, negative impact to capital, might reduce ability to pay dividend etc. Long term, higher yield will have positive impact to future profit.

observatory

1,059 posts

Posted by observatory > 2024-05-18 23:43 | Report Abuse

The Edge covers the privatization offer for Great Eastern Holdings (GEH). There are a number of interesting points.

0.7X P/EV is the cheapest acquisition in Singapore in 20 years.

The second cheapest is 2021 HSBC’s acquisition of Axa Singapore life business at 0.8X (incidentally, HSBC Malaysia is Allianz Malaysia banca partner)

GEH was traded at 0.5X P/EV before the acquisition offer. I might be wrong, but I suspect one reason for the low valuation was the low liquidity prior to the offer. OCBC already controlled 89% and a few other shareholders are long term investors like Sg Bagan. Sometimes only a few thousand shares traded in a day. Similar situation to Allianz just not long ago.

While OCBC moves further towards a financial supermarket model that include banking and insurance, DBS and UOB believe otherwise as they believe insurance “manufacturing” and distribution require different core competences.

If I look at Malaysia, our largest bank Maybank owns Etiqa and until now has no plan to float it. A looser arrangement is Hong Leong Bank distributing for HLA which is sister company.

So who is right?

observatory

1,059 posts

Posted by observatory > 2024-05-18 23:46 | Report Abuse

2024 first interim dividend has reduced by 16%

Posted by wsb_investor > 2024-05-19 01:08 | Report Abuse

No right or wrong. But need to know product strategy and maximise bancassurance channel. Etiqa as example, become top 6 purely with bancassurance, but another Tokio Marine, struggle to have meaningful market share with RHB bancassurance. HLA got mix of agency and banca, not sure with the split.

observatory

1,059 posts

Posted by observatory > 2024-05-19 12:42 | Report Abuse

Berkshire Hathaway announced it has acquired 6% of Chubb.

The EPS has climbed from $10 in 2016 to $22.5 in 2023, a CAGR of 12%. But despite share price increase, Chubb is currently priced at 12X forward PE. The valuation looks reasonable even though it was said that good years might have peaked.

Next I looked up Allianz SE, the forward PE is only 10-11X. Dividend yield is above 5%.

Although developed countries may have slower growth rate, but matured market may enjoy higher valuation. These two large insurers don't look expensive if compared with Malaysian counterparts.

troy88

2,974 posts

Posted by troy88 > 2024-05-20 09:51 | Report Abuse

Uptrend still intact to eventually join the RM30+ elite group..

observatory

1,059 posts

Posted by observatory > 2024-05-20 15:43 | Report Abuse

@wsb_investor,

I looked up the last 12 month results of a few Bursa insurers.

Company, Net Profit, Latest Equity, ROE
MNRB, 428m, 1334m, 3%
Manulife, 77m, 1270m, 6%
Allianz, 731m, 5141m, 14%
LPI, 341m, 2211m, 15%
STMKB, 347m, 1679m, 21%

They are in different sub-segments - P&C, life, or both; some conventional, some Takaful. But regardless of sub-segment, ROE measures how efficient the company is in deploying shareholder capital.

Not too surprised to find that Allianz and LPI are “better” than MNRB and Manulife.

But STMKB remains a puzzle. Post IFRS17, ROE declined a bit, but still above 20%, the highest among peers.

Is STMKB really the most efficient insurer when it comes to the use of shareholder equity? Do takaful operators need lesser capital as compared with conventional?

Any idea?

Posted by wsb_investor > 2024-05-27 01:33 | Report Abuse

In fact, in a way yes, for single premium product, there is 0 capital upfront. For ILP (regardless if conventional or takaful), there will be a strain, and a limit of how much can sell at a point.

So, in theory, say if we got 1.4bil population, STMB can immediately sell 45x of MRTA, but Allianz probably can only sell 3x of ILP before being restricted by the capital.

However, this is not meaningful at all. And similarly focus on ROE is not meaningful as well. MRTA is good, profitable business, but in the end, still restricted by how many new house loan by your bank partner.

mesoan

15 posts

Posted by mesoan > 2024-05-27 08:37 | Report Abuse

wsb_investor please share how 3X ILP is calculated?

Posted by wsb_investor > 2024-05-29 11:33 | Report Abuse

just a hypothetical number, could be 3x 5x, could also just be 2x.

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

@wsb_investor you worked in mgmt at insurance company or were you an actuary?

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

@observatory you are a very pro investor indeed. But you got one thing wrong: Some insurance companies have low ROE due to their riskier underwriting and markdown on investments. Especially re-insurers. So let's say you have one year of higher claims and cat losses, the combined ratio will shoot up, and ROE stays flat if investment returns also remain flat.

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

Switch to Allianz

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

Holding both MNRB and Allianz. Not worried at all

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

Entire forum suddenly became quiet. What the heck is wrong with yall

Posted by wsb_investor > 2 months ago | Report Abuse

Income Insurance, Allianz in talks on tie-up, seeking regulatory approval

observatory

1,059 posts

Posted by observatory > 2 months ago | Report Abuse

If it goes through, how might it affect Allianz Malaysia?

mesoan

15 posts

Posted by mesoan > 2 months ago | Report Abuse

@observatory I guess there's no impact. the tie up would benefit the mother company Allianz SE

observatory

1,059 posts

Posted by observatory > 2 months ago | Report Abuse

800k of ICPS have just been converted into ordinary shares.

ICPS provides 20% extra dividend but harder to sell. For 800k volume, if they cannot be sold in blocks, it’s better to convert into ordinary shares rather than sold at a discount to ordinary shares.

Based on shareholding information, I guess the shareholder is either EPF, or one of the Public or AHAM funds.

Posted by wsb_investor > 2 months ago | Report Abuse

New RBC framework just out yesterday, effectively 2027, but will have immediate impact on product mix starting next year.

troy88

2,974 posts

Posted by troy88 > 2 months ago | Report Abuse

Uptrend to resume soon after some consolidation for insurance stocks

Posted by wsb_investor > 1 month ago | Report Abuse

Many hoo-ha with co-payment medical insurance recently. Insurers are already moving away from cashless, yet some doctor association/consumer group jump out and said, cashless is better. Many people don't see the point that, the saving in premium, will higher than the deductible in just 2-3 years time. You might need to fork out RM500 or RM1000 for admission, but you save back premium (and hidden commission) in 2-3 years. There is no free lunch, for everyone, but dropping the cashless feature, will introduce a great saving immediately.

Posted by wsb_investor > 1 month ago | Report Abuse

For many white collar office job, you (and maybe your family) already covered by your employer's group insurance. There is no real need for you to have a cashless medical insurance.

Posted by wsb_investor > 1 month ago | Report Abuse

Allianz has announced a pre-conditional voluntary cash general offer to acquire at least 51% of the shares of Income Insurance, subject to regulatory approval. Allianz intends to offer $40.58 per share for a total transaction value of approximately $2.2 billion (approximately EUR 1.5 billion) for 51% of the shares in Income Insurance. The offer price represents a premium over Income's NAV of $29.55 per share of 37.3%.

observatory

1,059 posts

Posted by observatory > 1 month ago | Report Abuse

The business could be supported by the newly set up shared IT services in Malaysia. But any possible synergy with Allianz Malaysia?

Posted by wsb_investor > 1 month ago | Report Abuse

Allianz already has some existing shared service in Malaysia, but in a very weird arrangement.

observatory

1,059 posts

Posted by observatory > 1 month ago | Report Abuse

What do you mean?

Posted by wsb_investor > 1 month ago | Report Abuse

If my understanding is correct, Allianz will loan out its internal staff (under a single entity), as shared service to other BUs, and get to profit from it. A more common way is, shared service will operate as a separated entity (might or might not under local BU, typically not under local BU, but directly under Group).

observatory

1,059 posts

Posted by observatory > 1 month ago | Report Abuse

I see. Maybe for non-IT staffs. For IT they transferred the majority of Malaysian staffs to the new regional delivery center Allianz Technology Sdn Bhd

mesoan

15 posts

Posted by mesoan > 1 month ago | Report Abuse

but shared service is very small business, unlikely to improve Allianz mas earning

observatory

1,059 posts

Posted by observatory > 1 month ago | Report Abuse

Only after reading yesterday news that I realize Prudential parent company owns just 51% * 50.99% = 26% of Prudential Assurance Malaysia Bhd.
If Prudential can’t obtain greater control as per Federal Court’s decision, wouldn’t it discourage Prudential from growing its Malaysian market?
How would Prudential agents react?

Posted by wsb_investor > 1 month ago | Report Abuse

No,Pru plc owns 51% of PAMB. If bumi proxy can just anyhow songlap foreigner share, I think discourage Prudential from growing MY market is the least concern.

Before 1998, Pru plc owned 30% of PAMB, Berjaya owned ~69%. In 1998, Berjaya divested in PAMB, and supposedly sold all ownership back to Pru plc. However due to insurance act 1996, Pru plc cannot, on paper, own 100%, hence the Detik Ria (30% @ 1998) as bumi proxy. Vincent Tan personally also hold 19% of PAMB share at this point, only later (unknown when), sold the 19% to Detik Ria. Pru plc has signed some put and call options on the ownership of Detik Ria (i.e. fixed price) that it will repurchase back the ownership at later time.

Later in ~2017, BNM (or government) started to want to enforce the foreign ownership (now 70%), Pru plc then planned to get back the 49% and then disinvest accordingly. This Tommy, used the excuse that not getting MoF approval, but ignoring that BNM has given the approval. Next time how? listen to who? MoF or BNM?

Who is enforcing the 70%? BNM. From the article, BNM also ok with Pru plc approach, to get back 100% of share, and proceed with disinvestment accordingly. Then suddenly, VT and Tommy, come out with this idea, to songlap Pru plc ownership.



Posted by wsb_investor > 1 month ago | Report Abuse

Prudential is not the only company that foreign owns 100% via bumi proxy. GE has gotten exemption. AIA has approval from white house, probably no one dare to touch. HLA and Etiqa are local. Allianz/Manulife are listed. Sunlife/MCIS/Generali/FWD/AmMetlife all have local partner. Zurich and Tokio Marine probably still 100% foreigner own, with proxy.

observatory

1,059 posts

Posted by observatory > 1 month ago | Report Abuse

The Federal Court ruling cannot be further appealed. Wonder what can Prudential do. Negotiate and pay?

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