ALLIANZ MALAYSIA BHD

KLSE (MYR): ALLIANZ (1163)

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Last Price

13.08

Today's Change

+0.12 (0.93%)

Day's Change

12.94 - 13.10

Trading Volume

21,500


7 people like this.

1,102 comment(s). Last comment by observatory 6 days ago

Pinky

2,407 posts

Posted by Pinky > 2021-07-05 14:02 | Report Abuse

Another OPR cut will impact Allianz negatively again

Papayashot

355 posts

Posted by Papayashot > 2021-07-06 08:50 | Report Abuse

Hi Pinky, can you explain why OPR cut will affect Allianz?

Pinky

2,407 posts

Posted by Pinky > 2021-07-06 12:32 | Report Abuse

Allianz holding a lot of MGS, Malaysian Government Securities a.k.a. bonds.

When OPR is cut, fair value of existing MGSs will fall.

I explained it in detail the reason and mechanism for this fall in this forum thread, go dig my post a few months ago and read for yourself.

Posted by observatory > 2021-07-06 16:49 | Report Abuse

Should the fall in asset FV be partly offset by falling liabilities? But not sure about the magnitude. In the AGM they prefer rising interest rate.

No matter what, I think the interest rate change is a temporary factor. Not much effect on the long term outlook.

Moratorium

167 posts

Posted by Moratorium > 2021-07-06 17:07 | Report Abuse

Pinky oh Pinky... Value of a bond is inversely related to the interest rate.
When OPR is cut, fair value of existing MGSs will increase and not fall.
Finance 101

Pinky

2,407 posts

Posted by Pinky > 2021-07-06 17:35 | Report Abuse

Eh eh eh sorry sorry sorry

Mabuk FMCO dah XD

Pinky

2,407 posts

Posted by Pinky > 2021-07-06 17:38 | Report Abuse

The previous fair value hit to Allianz was due to rise of INTEREST RATE, not rise of OPR.

Rise of interest rate may, or may not be due to rise of OPR

Allow me to illustrate

Let's say BNM cuts OPR from 1.75% to 1.50%

HOWEVER, the MARKET may perceive that Malaysian government bonds carries a high risk (be it risk of default or risk of weak forex etc)

Hence, the market will SELL DOWN MGS, causing YIELD to go up

kotatatata

119 posts

Posted by kotatatata > 2021-07-08 17:57 | Report Abuse

They already knew August sales will be very bad so they keep selling ? Selling like mad everyday?-?

Posted by wsb_investor > 2021-07-09 09:54 | Report Abuse

1 month or even one full year of bad sales will not change anything. There is almost zero capital required to write a new business and no cost of inventory etc. The sales in fact are mostly campaign driven, and not surprised to see one month of sales can be 3x of another month.

Q1 2019 117.5
Q2 2019 167.8
Q3 2019 132.8
Q4 2019 176.7
Q1 2020 122.6
Q2 2020 90.8
Q3 2020 150.7
Q4 2020 167.7
Q1 2021 171.3

Pinky

2,407 posts

Posted by Pinky > 2021-07-09 11:07 | Report Abuse

EPF keep acquiring yet price keep falling...really no hope for capital gain. I keep as fixed deposit-substitute now.

Posted by wsb_investor > 2021-07-09 14:23 | Report Abuse

whole market is down, just collect if got free cash

Junichiro

2,050 posts

Posted by Junichiro > 2021-07-09 15:29 | Report Abuse

All its branches are closed for business whereas other insurance companies are still open.

Junichiro

2,050 posts

Posted by Junichiro > 2021-07-09 15:33 | Report Abuse

Posted by kotatatata > Jul 8, 2021 5:57 PM | Report Abuse

They already knew August sales will be very bad so they keep selling ? Selling like mad everyday?-?

In a sense, you are correct. All their branches are closed since 10 May 2021 till now. Some of my friends asked me if I have any idea on when they are reopening. Other insurance companies are open.

Posted by wsb_investor > 2021-07-10 00:46 | Report Abuse

Branches don't have to open to sell new insurance policies. In fact, even to settle claims, branches dont have to open as well. I did visit insurance company branch a few times before, but mainly just to switch funds, change payment method etc.

Moratorium

167 posts

Posted by Moratorium > 2021-07-10 12:10 | Report Abuse

Pinky The previous fair value hit to Allianz was due to rise of INTEREST RATE, not rise of OPR.

Rise of interest rate may, or may not be due to rise of OPR

Allow me to illustrate

Let's say BNM cuts OPR from 1.75% to 1.50%

HOWEVER, the MARKET may perceive that Malaysian government bonds carries a high risk (be it risk of default or risk of weak forex etc)

Hence, the market will SELL DOWN MGS, causing YIELD to go up

To the above, I agree. And with the latest political turmoil, it will certainly affect Allianz's investments. But overall, I don't have any issue to park my money here or average down if it continues dropping as I believe Allianz is a strong company with proven track record

Posted by observatory > 2021-07-12 20:33 | Report Abuse

The recent AGM presentation, webcast and additional Q&A have just been posted to Allianz website:
https://www.allianz.com.my/investor-updates

In the Q&A, Q19 asks "How much financing of investment-linked of new business has affected profitability of the recent quarter? Will the high growth rate such as the new business affect the future quarter’s profitably?"

The answer is "The minimum allocation rate for investment-linked products as imposed by
the regulator will create some new business strain for Allianz Life. However, the lower profitability in first quarter of 2021 was not from higher sales volume or new business strain but was mainly arising from fair value movement from the fixed income portfolio. Any changes in interest rate will create some volatility to the profit of Allianz Life."

Can anyone explain what is an "allocation rate" for an ILP?

How does the minimum allocation rate imposed by the regulator create new business strain?

Are ILPs sold at a paper loss during the first year such that the more are sold the greater are the (paper) loss?

Bgt 9963

7,445 posts

Posted by Bgt 9963 > 2021-07-12 20:51 |

Post removed.Why?

Posted by wsb_investor > 2021-07-13 15:23 | Report Abuse

First year premium < units allocation/creation + first year expenses + first year commission, thus will sell at a paper loss, in first year.

Posted by wsb_investor > 2021-07-19 21:16 | Report Abuse

AmGeneral sold @ 1.4x book value, while AXA sold @ ~1x book value, and give away life business for free

Bgt 9963

7,445 posts

Posted by Bgt 9963 > 2021-07-20 08:45 |

Post removed.Why?

Posted by observatory > 2021-07-20 10:37 | Report Abuse

The article says Liberty will become the largest auto insurer. Might Liberty and Generali bring better practices and technologies and pose stiffer competition?

Posted by wsb_investor > 2021-07-20 15:05 | Report Abuse

They both already exist in Malaysia market for years, not new entrance. Currently we have 21 conventional P&C insurers, after 1 year, will consolidate to 19.

Posted by observatory > 2021-08-06 14:06 | Report Abuse

Yesterday LPI posted a respectable Q2 result despite MCO which started in Jun. Quarterly revenue and PBT managed on YoY basis. I also noticed that not only motor claim but fire claim also dropped. Because factories not operating?

The general insurance business is more resilient than I've thought. Could this be specific to LPI or also applicable to Allianz and other GIs?

newbie8080

2,536 posts

Posted by newbie8080 > 2021-08-06 14:19 | Report Abuse

LPI heavily on general insurance unlike Allianz which has 60% of premium revenue comprise of Life insurance.


Compare the car/fire/theft with life, general insurance will be less affected than life insurance during pandemic period with many lost of jobs and biz affected.

Papayashot

355 posts

Posted by Papayashot > 2021-08-06 17:10 | Report Abuse

Interestingly, Allianz CEO said the opposite, tough for general insurance but slightly better for Life: "Meanwhile, commenting on its life insurance segment, Zakri says the company has been able to see some growth in this area as sales are also motivated by how secure people feel. “People who still have money are buying life insurance, and we are getting sales from here. Not fantastic but good enough as people are still purchasing life insurance,” he says."

Details can be found here:
https://www.thestar.com.my/business/business-news/2021/07/31/tough-tim...

Posted by observatory > 2021-08-07 12:29 | Report Abuse

There was an article on last Sat The Edge weekly which interviewed the Great Eastern group CEO Khor Hock Seng.

According to Mr. Khor, general insurance, with the right distribution and capabilities to manage products well, can be reasonably profitable. On the other hand, life requires more capital, so from an internal rate of return (IRR) basis, general insurance may be better. For general insurance, profit is evaluated yearly and not on future profits as life insurance is. But The Edge also mentions that in terms of absolute profit, though, life is higher than general insurance.

I'm not sure whether Mr. Khor is speaking about Singapore situation or insurance in general. As I understand the Malaysia GI space is competitive. But if GI really offers a better IRR, does it mean shareholder capital is better spent in expanding the GI business?

Posted by observatory > 2021-08-07 12:49 | Report Abuse

The other surprise for me is insurance companies hold a lot more capital than regulatory requirements. In Malaysia LPI capital adequacy ratio (CAR) exceeds 400%. In Singapore United Overseas Insurance is 449%, and Prudential is between 335% to 400%.

Why so much capital? Do these players see a lot of growth potential to underwrite new businesses so would rather hold on to the capital than returning to shareholders?

Posted by wsb_investor > 2021-08-08 21:07 | Report Abuse

There is almost 0 additional capital required for GI new business, due to short term nature, hence IRR is almost infinity.

But GI market in Malaysia is already saturated, there are just that many car or fire insurance that you can sell. For growth, GI typically aim to sell additional coverage for car insurance, or standalone health/CI insurance. But then, consumers in Malaysia typically prefer investment linked policies vs standalone health/CI.

For Allianz, its GI business is roughly there and the valuation wont change much. Life is the only possible catalyst to bump up its share price. Phase 2 reopen soon, and dine in allowed, more opportunities for Life side face-to-face sales.

Not to mention, Prudential recently announced Covid medical coverage (on reimbursement basis) for its policyholders, very likely all other big players will follow, and potentially can see a high sales in H2.

Allianz APE:
2019H1 : 285mil
2019H2 : 309mil
2020H1 : 213mil
2020H2 : 318mil
2021H1 : 335mil

Allianz is narrowing its gap with HLA (4th), based on NB APE.

Bgt 9963

7,445 posts

Posted by Bgt 9963 > 2021-08-09 09:07 |

Post removed.Why?

flyhub888

291 posts

Posted by flyhub888 > 2021-08-11 22:58 | Report Abuse

continue dropping zzz

Posted by wsb_investor > 2021-08-13 22:07 | Report Abuse

Operating profit in the region increased 8 percent to EUR 63 million, mostly in Thailand and Malaysia, driven mainly by our overall technical excellence programs and operations, including an expanded digitalization strategy for our core channels. https://www.allianz-asiapacific.com/news/allianz-asia-pacific-announce...

Bgt 9963

7,445 posts

Posted by Bgt 9963 > 2021-08-14 08:49 |

Post removed.Why?

Posted by observatory > 2021-08-19 22:17 | Report Abuse

Not just Allianz. AIA Life has also done well in Malaysia. Refer to slide 13. During 1H2021, VONB in Malaysia increased by 89%. It seems that life is doing very well despite current economic situation.

https://www.aia.com/content/dam/group/en/docs/press-release/2021/1H202...

Posted by wsb_investor > 2021-08-25 19:07 | Report Abuse

Q2 results also so so, mainly due to high claims provision and fair value from Life. https://www.allianz.com.my/documents/144671/1183195/2021_Q2_AMB_Analys...

stteck

750 posts

Posted by stteck > 2021-08-25 21:59 | Report Abuse

this qtr result is second best qtr result in record

Posted by observatory > 2021-08-25 22:36 | Report Abuse

According to quarterly report, total fair value gain is 49m in 2Q21 versus 368m in 2Q20. Adjusted for FV effect, PBT should be 158m in 2Q21 versus a loss of 120m in 2Q20. Fair to say YoY performance is good? But probably isn't a surprise since MCO 1.0 fell on 2Q21.

But on QoQ basis this quarter isn't as good. ANP and NBV also decline. However MCO 3.0 fell on 2Q21.

The lockdown effects have made it difficult to assess its underlying performance.

stevenckheng

1,208 posts

Posted by stevenckheng > 2021-08-26 08:33 | Report Abuse

No dividend?

derricksyl

452 posts

Posted by derricksyl > 2021-08-30 09:52 | Report Abuse

Well done Allianz ...

Posted by observatory > 2021-09-08 19:38 | Report Abuse

We refer to the Company’s latest update as announced via the Quarterly Report of the Company on 25 August 2021 with regard to the proceedings by the Company’s wholly-owned subsidiary, Allianz General Insurance Company (Malaysia) Berhad (“AGIC”), against Virginia Surety Company Labuan Branch.

The Board of Directors of the Company wishes to announce that the Court of Appeal of Malaysia had on 3 September 2021, dismissed AGIC’s appeal against the Kuala Lumpur High Court’s Decision delivered on 28 June 2019. (The High Court had on 28 June 2019 dismissed AGIC’s application to challenge the Award of the Arbitral Tribunal dated 8 February 2018).

As the matter involves the application of fundamental principles of insurance and reinsurance law, AGIC is in consultation with its legal advisers on its legal position and the next steps in relation to this matter.

This announcement is dated 8 September 2021.

https://www.bursamalaysia.com/market_information/announcements/company...

Posted by auditorandconsultant > 2021-09-11 16:58 | Report Abuse

I am very positive in Allianz. As of 10 September 2021, the lowest point is RM12.48 and the highest point is RM15.38. As such, I personally opine that any price below RM13 is considered a good entry price. Remember, you can start collect on dip.

The reason for the recent decrease in price, in my personal opinion, might be due to 2 main reasons which are the (1) political instability; and (2) pandemic which creates negative sentiment in the market.

Allianz is a solid counter for capital appreciation and for mid to long term investment.

As of 6 September 2021, EPF own directly 11,043,900 shares (6.2220%)

Do not worry as EPF has been acquiring non stop as follows:-

03/09/2021 --- acquired 50,500
25/08/2021 --- acquired 15,200
20/08/2021 --- acquired 47,500
18/08/2021 --- acquired 8,600
17/08/2021 --- acquired 21,000
16/08/2021 --- acquired 3,700
13/08/2021 --- acquired 90,500
09/08/2021 --- acquired 4,500
04/08/2021 --- acquired 11,000
03/08/2021 --- acquired 12,300
30/07/2021 --- acquired 2,100
28/07/2021 --- acquired 32,000

Personally, I think Allianz's price might be going up very soon due to (1) higher vaccination rate for herd immunity; and (2) re-opening of economic activities soon.

Taking into consideration solid fundamental of Allianz with strong and healthy financial position, I have no doubt on Allianz's price going up really soon. I do hope that by end of September 2021, the price will fly above RM13 and slowly go up to RM14 and above.

My two cents. This is only my personal opinion for sharing purpose. Any investment decision is your own responsibility.

Posted by auditorandconsultant > 2021-09-11 17:04 | Report Abuse

@Pinky

Wow you also hold Allianz.

We have same portfolio for Long Term Investment, BAT and Allianz

DickyMe

12,022 posts

Posted by DickyMe > 2021-09-13 16:52 |

Post removed.Why?

Posted by kentnherman > 2021-09-15 09:05 | Report Abuse

@auditorandconsultant where did you find the top 30 shareholder? i cannot find any details in their annual report. Thanks

Posted by auditorandconsultant > 2021-09-16 17:19 | Report Abuse

@kentnherman

Please turn to Page 113 for the top 30 shareholders.

As at 12 April 2021,

1) Allianz SE --- 65.11%
2) EPF --- 3.83%

and so on

Posted by auditorandconsultant > 2021-09-16 17:31 | Report Abuse

I am very very optimistic and confident in Allianz Malaysia.

Despite difficult time in year 2020, the result of Allianz Malaysia was still impressive.

1) Operating Revenue -- Increased 7.4%
2) Gross Written premium -- Increased 7.8%
3) Total Assets -- Increased 11.1%
4) Profit Before Tax -- Increased 5.4%
5) Shareholders' Funds -- Increased 9.7%
6) Basic Earnings Per Share -- Increased 11.6%

Intrinsic Value ("IV") which was calculated based on readily available information as of 3 Dec 2020 = RM20.71

The above IV was before the final and audited result for FY2020.

Indeed, EPF has been collecting from time to time.

In my humble opinion the current price of RM12.76 is very much Undervalued. I feel that it is a hidden diamond which a lot of investors might overlook.

Some argued that the price is too high. Remember, Price is what you paid, Value is what you get!

With rapid vaccination and gradual re-opening of economic activities, I strongly believe Allianz will be able to attract more sales soon while retaining existing customers.

The ongoing plan for the 3-month moratorium interest-free plan is good for those who are really in financial difficulty. They could enroll in moratorium and defer the loan payment but at the same time use that fund to continue settle other obligations which includes but is not limited to payment of insurance premium.

Disclaimer: - Buy or Sell or Hold is your own decision and responsibility. The information above is only for sharing and shall not be deemed as an advice for any investment or divestment decision.

Posted by auditorandconsultant > 2021-09-19 21:30 | Report Abuse

Hopefully, tomorrow Allianz can go up to at least RM13.00.

Allianz is a hidden gem but why not many retail investors want to buy and EPF keep on collecting Allianz at this very much undervalued price.

Hope for the best.

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