Posted by unicornbird > 2023-06-07 08:17 | Report Abuse

wsb, ILP is a tax for the country. Most of the profits will be repatriated back to their home country
it's a kind of colonialism, as those products don't really generate reasonable yield for the holder.
Does Allianz get more allowance from the gov, because EU has increased investment in malaysia?

Posted by wsb_investor > 2023-06-07 08:56 | Report Abuse

BNM regulate how much dividend is allowed to repatriate overseas, that is why insurance in Malaysia is very well regulated. ILP is a very well designed product, take away investment risk that insurer scare, pass on to policyholder that willing to bear the risk. Almost everyone knows equity is risker, but almost everyone will select equity fund for their ILP policies. If the product is not ILP (say designed as a standalone), then insurers will only invest in fixed income + some equities instead. No special allowance that I aware of.

Posted by wsb_investor > 2023-06-07 17:52 | Report Abuse

Prudential just shared on insta that out of 2.04bil claims paid in 2022, medical = 1.46bil (71.6%).

Posted by unicornbird > 2023-06-07 19:50 | Report Abuse

wsb, do you think Allianz can continue to grow together with economy?
or does it has to compete & eat into market share of the large competitors like AIA & Prudential

Posted by wsb_investor > 2023-06-08 19:05 | Report Abuse

Tokio Marine taps Goldman, Jefferies to sell US$1bln Southeast Asia life insurance unit-sources

Posted by observatory > 2023-06-08 21:05 | Report Abuse

What are the chances for Allianz parent to dispose Allianz Malaysia? If that happens, minority shareholders will get a Mandatory General Offer. However how to circumvent 30% local ownership rule given that any buyer is likely to be another large MNC?

What about the chances for Allianz Malaysia paying a premium to acquire a competitor? But given Allianz doesn't have the necessary capital to mount a meaningful acquisition (since dividend payout has increased), it will require capital injection and shareholders' votes, not to mention regulatory approval too, which are complicated.

Could we therefore deduce that any M&A involving Allianz is very unlikely?

Posted by observatory > 2023-06-08 21:22 | Report Abuse

There could be a scenario for a MNC to team up with EPF to acquire Allianz Malaysia (assume, for whatever reason the parent is willing to sell, which I have absolutely no idea).
With its 1 trillion asset, EPF certainly will have the resources to take up 30% of Allianz Malaysia. There could also be future synergy of banca partnership with EPF controlled banks like RHB and MBSB.
However I doubt EPF will pay a premium for such acquisition given it can currently buy Allianz from the open market. If EPF is out, I can't think of any other local entities.

Posted by observatory > 2023-06-08 21:31 | Report Abuse

Looking back, when AIA acquired ING Malaysia in 2012, the latter ranked number 3 then (Today Allianz is number 4 in life and 1 in general). Not sure how AIA got an exemption from the ownership rule which was introduced in 2009.
https://www.aia.com/content/dam/group-wise/en/docs/press-release/2012/aia-group-press-release-20121218-en.pdf.coredownload.inline.pdf
How likely will such exemption be granted today?
And could Allianz just dispose one rather than both businesses (few buyers will be both capable and interested to acquire both)

Posted by wsb_investor > 2023-06-08 23:55 | Report Abuse

Allianz will almost never dispose Allianz Malaysia, as it already hit critical mass. You can observe that insurers that keep changing ownership, e.g. UNIASIA > GBSN > FWD, Tahan > AXA Affin Life > Generali, all are just small players, that struggle to sustain.

Prudential used to talk with KWAP for the 30% issue. Personally I feel KWSP/KWAP/ASNB etc should indeed explore to invest in insurance, even without push from government. We really cannot allow foreigner to control our hospitals and insurance. We need foreign talents, yes, but we must in control. So far, except the 30% issue, BNM/government still has a strong control over insurance companies.

Many secret arrangement (or scandal) between GE/AIA/Pru and our government.
GE donated 2bil in 2018
AIA
https://www.spglobal.com/marketintelligence/en/news-insights/trending/4zrc31t1740qjcfahdm9na2
Prudential
https://theedgemalaysia.com/article/newsbreak-prudential-goes-court-over-stake-malaysian-licensee

Posted by unicornbird > 2023-06-09 08:50 | Report Abuse

For AIA it's like a trade agreement. US invest so much in Penang, in return, Malaysia may offer them perks like full ownership of insurance company. But British Prudential may get hit, as their investment in Malaysia is much lesser. Unless Jardine, Rolls royce & GSK enter

Posted by observatory > 2023-06-09 14:26 | Report Abuse

Will a general takaful license nicely complement Allianz' general insurance business?
As far as I know there are only 4 players - Etiqa General, Syarikat Takaful Am, Takaful Ikhlas General, and Zurich General Takaful.
But it's probably difficult to acquire an existing player.
Shouldn't BNM issue more licenses to encourage competitions?
My impression is the sector is not only fast growing and but is also lucrative. For example, based on product brochure available on STMB last year, wakalah fee for its fire insurance was listed as 55%, and PA at 60%.

Posted by observatory > 2023-06-09 14:28 | Report Abuse

AIA has become less American after AIG disposal.
The company is incorporated in HK. It has a HK Chairman and Singaporean CEO. Yes, many American funds like Vanguard, Blackrock and Capital Group are counted as shareholders. But AIA's shareholding is diverse, just like HSBC. It will be hard to get the US government to lobby on its behalf in the future.

Posted by wsb_investor > 2023-06-09 15:37 | Report Abuse

You still can't stop if the board/management wants to pro-US, e.g. in the case of HSBC vs Huawei.

Fire and PA business (or any high severity, low probability insurance) are always lucrative (but small premium), regardless if conventional/takaful. In fact, by concept, takaful will be more expensive (to policyholder) and less profitable (to insurer).

In my opinion, not much point for Allianz to explore takaful license. Takaful business will not be profitable in first 5-10 years. Previously BNM allowed for takaful window operation, but now I don't think it is allowed anymore.

Posted by observatory > 2023-06-09 16:45 | Report Abuse

You said takaful takaful will be more expensive (to policyholder) and less profitable (to insurer).
I don't understand. Unless the scale is too small (fixed cost spread over fewer policy holders), otherwise wouldn't more expensive products boost insurers' bottomline?

Posted by observatory > 2023-06-09 16:47 | Report Abuse

5-10 years to achieve profitability in takaful. Is it because it takes time to build scale?
Could Allianz leverage on its existing general insurance distribution channels, and thereby shorten the time to profitability?
It can use existing franchise at car dealers to offer both conventional and takaful products. It may retain Muslim customers who may be attracted to takaful. This helps to defend the overall market share in the long run.

Posted by speakup > 2023-06-09 19:37 | Report Abuse

The only reason Allianz is rm14 is because it is orang putih counter. We Malaysian suka tunduk to the orang putih

Posted by observatory > 2023-06-09 20:17 | Report Abuse

Well managed MNCs such as Allianz and Nestle don't engage in bonus issue gimmick.
If RM14 is considered expensive, does it mean Borneo Oil at 1.5 sen is very cheap?

Posted by observatory > 2023-06-23 11:31 | Report Abuse

The two businesses have a combined customer base of 3.8m. But customer overlap is only 100+k. They're right that there exists opportunity for cross-selling. Just not sure how easily that this can be done given the need to align incentives.
https://klse.i3investor.com/web/blog/detail/ceomorningbrief/2023-06-23-story-h-247530969-Allianz_Mum_on_FY2023_Dividend_But_Targets_Over_30_Payout_Ratio

Ping An also emphasizes and even regularly reports its agents' cross selling contribution.

Posted by wsb_investor > 2023-06-23 15:40 | Report Abuse

AGM slide:
https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/pdf/investor-updates/2023/Annexure1_49thAGMPresentation.pdf

Posted by wsb_investor > 2023-07-04 20:01 | Report Abuse

州选后若重呈医改 国民健保料成重头戏 https://www.sinchew.com.my/20230704/%e5%9b%bd%e6%b0%91%e5%81%a5%e4%bf%9d%e6%96%99%e6%88%90%e9%87%8d%e5%a4%b4%e6%88%8f/

Posted by HumbleLearner > 2023-07-13 11:57 | Report Abuse

Hi, I am a newbie here, Why epf keeps throwing, anyone could kindly give me some hints?

Posted by wsb_investor > 2023-07-14 09:19 | Report Abuse

satisfied with their 20+% return in 2 years time already ba?

Posted by unicornbird > 2023-07-18 19:07 | Report Abuse

wbs, obs, can share why the recent quarter, the revenue fall so sharply to 1,161,374
and yet the net profit increase by so much?

Posted by wsb_investor > 2023-07-20 09:43 | Report Abuse

record high 15.8 for Allianz-PA, but low volume.

Posted by wsb_investor > 2023-07-20 12:50 | Report Abuse

https://www.prudentialplc.com/~/media/Files/P/Prudential-V13/news-releases/2023/ifrs17-briefing-presentation.pdf

Prudential IFRS17 investor presentation shows a clearer picture on IFRS17 impact on different countries/regions (probably the first that publicly available).
Typically, insurance has a very heavy investment elements in advanced countries/regions (e.g. UK, EU, HK), which IFRS17 impact on profit is negative, but insurance with very high protection elements, IFRS17 impact will be positive (exclude single premium).
You can observe very high positive IFRS17 impact in Indonesia (+50%) and Malaysia (+33%).
For Singapore, which insurance is usually sold as investment, suspect is due to Prudential Sg's Medical Shield business, not familiar with business split of Prudential Sg.

Posted by observatory > 2023-07-20 16:14 | Report Abuse

wsb_investor, thank you for sharing.
I read the slide. Red bars represent IFRS17 operating profits, whereas blue bars represent IFRS4
The operating profits for Indonesia is USD0.2b under IFRS17, versus USD0.3b under IFRS4. Similarly, Malaysia is USD0.3b under IFRS17, USD0.4b under IFRS4. Operaitng profits at both countries have declined under IFRS17.

Posted by observatory > 2023-07-20 16:16 | Report Abuse

ICPS should be more valuable if held for long term due to higher dividends. But there should be a discount if it's held for short term because of poor liquidity. Given the ICPS premium versus ordinary shares has expanded a bit, I assume the company has drawn interest of some long term investors recently. But likely retail investors due to the small trading volume.

Posted by observatory > 2023-07-20 16:29 | Report Abuse

unicornbird, definitions of revenue and profits change under accounting standards. Frankly I don't know how to compare/ explain. To better understand life insurance, you need to look beyond just revenue and profit

Posted by unicornbird > 2023-07-21 08:11 | Report Abuse

obs, wsb, thanks for sharing the new accounting standard, that caused the quarter revenue to drop
Now I see the reason for sharp drop. I am looking to increase stake in Allianz, now going to spend more time studying them

Appreciate if you could share some detailed analyst report

Posted by observatory > 2023-07-22 15:04 | Report Abuse

Get from BursaMarketplace

Posted by unicornbird > 2023-07-22 20:02 | Report Abuse

Thanks obs, i found a nice one by Affin https://www.bursamarketplace.com/mkt/tools/research/ch=research&pg=research&ac=170928&bb=174400

Posted by speakup > 2023-07-22 22:13 | Report Abuse

If u interested in Insurance companies, there are only 3 listed companies in bursa: Allianz, Syarikat Takaful, MNRB

Posted by speakup > 2023-07-22 22:13 | Report Abuse

Mana yang best?

Posted by The_JQuestion > 2023-07-22 22:28 | Report Abuse

dont forget tunepro also listed and cheapest of them all !!

Posted by Rambutan9 > 2023-07-24 16:38 | Report Abuse

There is one more,LPI.

Posted by Rambutan9 > 2023-07-24 16:41 | Report Abuse

MNRB , Allianz and Takaful are ok,I think so.

Posted by unicornbird > 2023-08-01 08:29 | Report Abuse

wsb, could you please share if insurance industry is heavily regulated like the banks?
who is regulating them?

Posted by wsb_investor > 2023-08-01 13:15 | Report Abuse

PETALING JAYA: Singapore insurer Great Eastern Holdings Ltd is reportedly in talks to buy MetLife Inc’s Malaysian venture, according to people familiar with the matter.

The subsidiary of Oversea-Chinese Banking Corporation (OCBC) is conducting due diligence on AmMetLife Insurance Bhd and seeking regulatory approval to clinch the deal, the people said.

A transaction could value AmMetLife, which US-based MetLife jointly owns with Kuala Lumpur-listed AMMB Holdings Bhd, at between US$250 million (RM1.12 billion) and US$300 million (RM1.34 billion), the people said.

Posted by wsb_investor > 2023-08-01 13:25 | Report Abuse

Insurance is probably more regulated than the banks in Malaysia (and all other advanced regions).
Everything from pricing to commission to illustration to policy wording, all required approval from BNM.

Posted by wsb_investor > 2023-08-01 13:40 | Report Abuse

AGM QA:
In the Life segment, growth plays a vital role as it brings in NBV for Allianz Life. The term "Coming of Age" refers to the point at which Allianz Life's business reaches maturity and that the in-force profit on the life business will continue to emerge. Subject to meeting regulatory solvency requirements, the Management aspires to elevate performance and enhance dividend payments.

Posted by unicornbird > 2023-08-01 18:02 | Report Abuse

wsb, if they are so heavily regulated, why they are allowed to sell Life policy?
life policy always give unrealistic projection for future earning. In most cases, it cannot be achieved
that's why a lot of people have negative impression of insurer

Posted by wsb_investor > 2023-08-01 19:15 | Report Abuse

It used to be like each companies will use own historical return to project the future return for ILP/Par saving, but now is regulated to 2%/5% (if not mistaken).

To be fair, KLCI has been performing very badly, especially since 2018, and ILP/Par invested heavily in KLCI. You can't really blame insurers for not able to achieve projected return.

*there are limitation on how much local insurers are allowed to invest overseas (8% I think), however, heavily invested in overseas also not a good idea.
https://www.bloomberg.com/news/articles/2023-07-26/us-rate-hikes-haunt-taiwan-s-1-trillion-life-insurance-industry

Posted by wsb_investor > 2023-08-01 19:23 | Report Abuse

If not mistaken, the 2% is always there, to illustrate to policyholders a low return scenario, but the 5% previously was historical return/expected return, which much higher than 5% (it was 9% in my policy document, 100% equity fund).

There is already nothing wrong here, there is a best estimate scenario, and a low return scenario.
However, due to numerous complaints, and the continuously underperforming KLCI (5Y FBM100 return is now -20%), BNM finally instructed insurers to show 5% return only.

Singapore had similar issue and took similar initiative as well, and they use 4.25%.
https://www.lia.org.sg/tools-and-resources/illustrated-investment-rate-of-return-for-par-policies/

Posted by unicornbird > 2023-08-02 09:26 | Report Abuse

wsb good info. I guess when the agent sell the policy, they will always mention the best case scenario. thus creating the mismatch in expectation

Do you have the estimated number of policy holder, who hold life policy till maturity?
I think probably half of policy are dropped due to various issues
this is good for shareholders, as early redemption penalize heavily on policy holder. thus giving us free money

Posted by wsb_investor > 2023-08-02 09:35 | Report Abuse

definitely less than half, probably already more than half policyholders drop off in first 5 years. it depends on the product type, for some, say protection type ILP, early lapse will forfeit future profit (company don't really earn much in first 5 years for ILP, due to lower premium, high commission). total commission in first 6 years ~200% of total premium, plus about 300-400 fixed expenses per policy sold. ILP typically will have negative cashflows to the company in first 1-2 years, and any lapse in this period, will lead to actual loss, on top of forfeiting future profit.

Posted by unicornbird > 2023-08-02 12:16 | Report Abuse

thanks for the insights, please help to check my understanding

Insurer Loss -- If policyholder cancel policy in first 2 years. Due to commission paid to agents, & other fixed cost
Insurer Win -- If policyholder cancel policy after 6 years?

Posted by unicornbird > 2023-08-02 12:17 | Report Abuse

Shouldn't insurer apply heavier penalty?
to ensure they win, even if policyholder cancel in first 2 years.

Posted by wsb_investor > 2023-08-02 12:30 | Report Abuse

it really depends on product type, there are products that insurers will profit from early surrender (e.g. Y3/Y4), typical all non-ILP, there are also some that insurers will loss from early surrender, typically ILP. BNM got a rule that penalty can only apply up to a level where insurer can recoup back upfront cost, but this typically only for Par saving plan. Due to competition, there is usually no such penalty for protection ILP (except for those saving type ILP).

Posted by wsb_investor > 2023-08-02 13:18 | Report Abuse

Assets: Allianz Life = 4x of AmMetlife
Premium: Allianz Life = 6x of AmMetlife
Claims: Allianz Life = 6x of AmMetlife
IFRS4 profit: Allianz Life = 2.6x of AmMetlife
ILP unit fund: Allianz Life = 16x of AmMetlife

AmMetlife = 1.1bil MYR

Posted by wsb_investor > 2023-08-02 13:29 | Report Abuse

2022 NB APE, Allianz Life = 5x of AmMetlife
Unlikely Allianz heavily on ILP, AmMetlife products heavily on regular premium conventional (high cost of capital) and group insurance (annual renewable).