tune ins holdings berhad (948454-k) - chartnexus · debt-free balance sheet position ... • embed...

INSURANCE MADE EASY1

Tune Protect Group Berhad(formerly known as Tune Ins Holdings Berhad)

Q3FY15 Financial Results Analyst Presentation

Nov 2015


01Page 3 - 7

EXECUTIVE SUMMARY

• Key Highlights • 9MFY15 – Financial

Highlights • 3QFY15 – Financial

Highlights • Key Strategies • Outlook

3Q2015 & 9M2015Financial

Performance• Group• Global Travel• General Insurance

(TIMB)• Overseas Ventures

02Page 9 - 12

APPENDICES• Other Financial

Indicators

03Page 14 - 18

A G E N D A


Key Highlights

Travel insurance business continues to grow offset by slower domestic general insurance demand

Rebranding & Reposition

Global Travel

General Insurance

• Invested to build customers “brand awareness” via integrated above-the-line advertisingcampaigns and social media

• Direct to consumer website launched in September together with new mobile app to belaunched in November

• GWP growth of 21% in 9MFY15 vs 9MFY14 driven by steady demand in main markets coupledwith total policies issued picked up in Q3 mainly driven by Malaysian market

• Travel portfolio diversification increased to 10% contribution from non-AirAsia partners for 9Mperiod

Malaysia (TIMB)• Moderate growth in top line of 7.5% in 9MFY15 higher than industry average amidst slow down

in the domestic economy and regional uncertainties

Thailand (TIPCL)• Continued investment to build brand awareness via launching of new products, new marketing

initiatives & partnerships

3

Overall performance• 9MFY15 underlying performance mainly driven by growth in travel business moderated by

softening domestic general insurance demand

• Q3FY15 PAT mainly impacted by higher royalty payment and rebranding expenses despite healthy growth in travel demand especially in Malaysia


47.7 47.7

9M 2014 9M 20159M 2014 9M 2015

9 Months 2015 – Financial Highlights

9M 2014 9M 2015

Growth in Operating Revenue mainly attributed to growth in total GEP of 20.3 mil mainly from motor, fire & travel classes ofbusinesses

Double digit growth of 13.1% in NEP underpinned by double digit growth in both global travel and TIMB businesses in motor & travel

On a normalised basis (excluding one off gain from sale of building in Q1FY14), flat PAT growth mainly driven by healthy traveldemand in Malaysia but impacted by (1) increase in royalty fee incurred of RM7mil partially deferred to this year and (2) decrease ofRM2.8 mil from share of profit of Thai associate whereby there was a write back of provision for doubtful debt in 3QFY2014

Debt-free balance sheet position coupled with 11.5% growth in total assets

Flat PAT underpinned by healthy travel performance offset by higher management expenses

1.1 1.2

FY2014 9M 2015

OPERATING REVENUE(RM mil)

NET EARNED PREMIUM(RM mil)

PROFIT AFTER TAX(RM mil)

TOTAL ASSETS(RM bil)

4

4.3*

* RM4.3mil – one off gain from sales of building in Q1FY14 including brokerage fee # Excluding one off gain from sale of building in Q1FY14

325.0 347.5

192.6 217.8


16.9

13.3

3QFY14 3QFY15

Third Quarter 2015 – Financial Highlights

109.5 121.0

3QFY14 3QFY15

67.9

80.7

3QFY14 3QFY15

OPERATING REVENUE(RM mil)

NET EARNED PREMIUM(RM mil)

PROFIT AFTER TAX(RM mil)

COMBINED RATIO(%)

3QFY14 3QFY15

Growth in Operating Revenue underpinned by growth in GEP of RM10.8 mil in motor, fire, travel classes of businesses

NEP growth of 18.9% driven by growth in TIMB business of RM8.5 mil mainly in higher retention in motor & growth in fire coupledwith good traction in travel especially in Malaysia

Lower PAT of 21.6% attributed to healthy growth in travel especially in Malaysia, though impacted by (1) increase in royalty fee ofRM2.9mil (2) lower PAT in TIMB as a result of MMIP tax credit booked in 3QFY2014 and not in 3QFY2015, booking of 1H2015 MMIPinto 3QFY2015, and slightly lower investment income (3) decrease of RM3.5 mil from share of profit of Thai associate whereby therewas a write back of provision for doubtful debt in 3QFY2014

Higher combined ratio of 94.6% mainly due to higher ME due to increase in royalty fee of RM2.9mil, higher rebranding cost of RM1mil arising from change of name and increased employee cost in line with the business expansion

Results impacted by higher management expenses despite double digit growth in top line

5

88.8%94.6%


Five Key Strategies

STRATEGIES PERFORMANCE TO DATE ACTIVITIES

Continue to grow with AirAsia

• YTD sales growth of 20% • Collaboration with 6 lifestyle companies (e.g hotel, online shopping portals etc) on loyalty programme to enhance customer engagement

• Ongoing training programme to the top 5 identified travel agents in Malaysia to grow offline

• Roadshow for overall offline market in China in September (travel agents, ATSC) and participated in travel fair in China

• Bali Beach Run 2015 – became the core sponsor to gain publicity and increase brand awareness in Indonesia (>2,000 participants)

Global Player inTravel Insurance

• Non-AirAsia partners make up 10% of Global Travel GWP YTD

• Cebu Pacific Air : YTD sales growth of 52% YTD

• AirArabia/Cozmo:YTD sales growth >100% YTD

AirArabia / Cozmo :• Launched “Tune Protect Lifestyle Assurance Products”, standalone “Family Plan”• Launched “Tune Protect Baggage Assurance by Hala”, available to all international travelers

departing from Sharjah International Airport, at the Hala check-in as well as baggage wrap counters

• Partnership with Dadabhai Travel and collaboration with iRiskcorp

Strengthendigital businessfundamentals

• Broaden market reach & leverage composite through digital

• Launched direct to consumer website and new mobile app • Creative print ads to announce new brand & build awareness – protective zip lock bag

concept• Advertisement on billboards & busses; build stronger brand imagery amongst Youth

• Malaysia: YTD retention ratio increased by 3% yoywith higher retention in motor

Thailand • To offer insurance to retail customers via bancassurance• Grow agency channel (motor insurance sales) • To collaborate with partners ie: telco operator, property, hotel, retail & electrical appliance

chain etc.

Strategic Acquisition

• Continue to pursue acquisition target

Indonesia – announcement on termination in August as both parties mutually agreed to terminate the conditional agreements given conditions precedent mentioned in the binding offer not met

1

2

3

4

5

Enhance distribution channels & optimize retention

Continue to deliver on our strategies

6


Outlook

Global Travel

General Insurance

Partnerships, E-Commerce & Innovation

• Malaysia – Top line is expected to grow at a moderate pace but better than industry average

given the challenging economic climate especially stagnant sales in motor & property

• Thailand – Continue to grow top line via corporate partnerships with bank, renewal of existing

business & travel business

7

• Marketing collaboration to offer value add with growing e-commerce players ie: ride sharingplayer – to drive traffic & sales through our direct to consumer platform

• Explore partnerships with leading e-commerce players, airlines/non-airlines

• Introduce new products and optimise database marketing activities focusing on Malaysia &Thailand, and Indonesia next.

• Travel is expected to be encouraging especially for Malaysia with positive impact from lowerringgit on inbound travelers, government initiatives to promote tourism includingimplementation E-Visa by mid-2016

• Continue to expand our distribution channels & improve take up ie: B2B and expansion to newmarkets in MENA

• Enhance customer engagement via more collaboration with lifestyle companies (F&B, healthetc) by providing value add to travel policyholders

• Expand baggage protection insurance to Malaysia via MMB & web check in, kiosk & mobile

• Embed insurance in business class & premium flex tickets, annual travel plan (stand alone) viamanage by booking (lifestyle) & AA GoCorporate


A G E N D A

8

01Page 3 - 7

EXECUTIVE SUMMARY

• Key highlights • 9MFY15 – financial

highlights • 3QFY15 – financial

highlights • Key Strategies • Outlook




02Page 9 - 12


Indicators

03Page 14 - 18


Tune Protect Group – Snapshot for 3Q2015 & 9M2015 Results

9

TPG (Consolidated) Q3 2015 Q3 2014 Q3 vs Q3 (%) 9M 2015 9M 2014 9M vs 9M (%)

(in RM’000) A B A vs. B C D C vs. D

Income Statement

Operating Revenue 121,046 109,510 10.5% 347,546 324,972 6.9%

Gross Written Premiums 109,125 108,672 0.4% 357,644 333,223 7.3%

Net Earned Premiums 80,743 67,886 18.9% 217,817 192,590 13.1%

Investment and Other Income* 10,587 5,947 78.0% 24,348 22,159 9.9%

Investment and Other Income*

(excluding sales of building) 10,587 5,947 78.0% 24,348 17,862 36.3%

Net Fees & Commission (14,394) (11,947) 20.5% (37,557) (31,659) 18.6%

Net Claims (38,952) (31,706) 22.9% (91,509) (82,485) 10.9%

Management and Other Expenses (23,198) (16,620) 39.6% (63,878) (49,494) 29.1%

Share of results of JV 181 125 44.8% 415 95 336.8%

Share of results of associates (1,545) 1,979 -178.1% (472) 2,318 -120.4%

PAT 13,275 16,924 -21.6% 47,704 51,953 -8.2%

PAT (excluding one off) 13,275 16,924 -21.6% 47,704 47,656 0.1%

Key Ratios Movement Movement

ROE (annualised) 11.4% 16.2% -4.8% 13.6% 16.6% -3.0%

ROA (annualised) 4.4% 6.2% -1.8% 5.2% 6.4% -1.2%

Basic EPS (sen) 1.71 2.15 -20.5% 6.05 6.62 -8.6%

Net commission ratio (%) 17.8% 17.6% 0.2% 17.2% 16.4% 0.8%

Net claim incurred ratio (%) 48.2% 46.7% 1.5% 42.0% 42.8% -0.8%

Management expenses ratio (%) 28.5% 24.4% 4.1% 29.3% 25.6% 3.7%

Combined ratio (%) 94.6% 88.8% 5.8% 88.5% 84.9% 3.6%

* Including investment income, realized gains and losses, fair value gains and losses and other operating income


Others14% (6%)

Others7% (7%)China

5% (7%)

Global Travel

3Q2015

29.2 m 16%

9M2015

94.0 m 21.4%

3Q015

29.7 m 17.3%

9M2015

89.5 m 14.5%

3Q2015

16.4 m 35.2%

9M2015

45.7 m 11.7%

GROSS WRITTEN PREMIUM

NET EARNED PREMIUM

PROFIT AFTER TAX

TOTAL POLICIES ISSUED

(Policies Count includes AirAsia, Cebu Pacific, Air Arabia & Cozmo)

Gross Written Premium• 3QFY15 & 9MFY15: Continuous double digit growth in GWP mainly driven by

demand for insurance coverage in both Malaysian and Thai markets

Net Earned Premium• 3QFY15 & 9MFY15 : Decent growth in NEP driven by continuous growth in top line

especially in Malaysia & Thailand despite UPR strain in line with the businessexpansion

Profit After Tax• 3QFY15 & 9MFY15 :Growth in PAT mainly driven by continuous growth in top line

coupled with the recognition of unrealised foreign exchange gain of RM2.5mil inQ3FY15 as a result of weakening ringgit

Total Policies Issued• 9MFY15: Total policies issued of 6.19 mil mainly driven by growth in policies issued

in Quarter 3 especially in Malaysia of 10% & Thailand of 34% respectively

9MFY15: Double digit growth in PAT driven by continuous growth in travel in Malaysia & Thailand despite travel headwind

10

yoy yoy

yoy yoy

yoy yoy

3Q2015

2.00 m 10.5%

9M2015

6.19 m 6.3%yoy

ASIA9M 2015

MENA & EU9M 2015

6.03 million in 9M 2015(vs. 5.75 million in 9M 2014)

161.1 k in 9M 2015(vs. 79.9k in 9M 2014)

9M2015 Composition 9M2014 Composition

Malaysia

54% (51%)

Thailand

20% (18%)

Indonesia

9% (13%)

Singapore4% (5%)

U.A.E50% (59%)

India15% (14%)

Morocco10% (11%)

Egypt6% (5%)

Europe5% (5%)


Misc13% (13%)

Fire16% (15%)

Motor26% (28%)

Misc12% (13%)

Fire19% (17%) GWP

9M2015 TPA, PA & Medical

32% (27%)

Marine13% (17%)

GWP3Q2015

Motor24% (25%)

TPA, PA & Medical

33%(30%)

Marine12% (15%)

Malaysia (TIMB)

GROSS WRITTEN PREMIUM

NET EARNED PREMIUM

PROFIT AFTER TAX

3Q2015

96.9 m 1.7%

9M2015

314.2 m 7.5%

3Q2015

51.0 m 19.9%

9M2015

128.3 m 12.2%

3Q2015

2.7 m -42.4%

9M2015

13.2 m -4.4%

Gross Written Premium• 3QFY15: Lower growth amidst slow down in the domestic economy especially with

the reduction in disposal income post GST implementation and the depreciation ofthe ringgit, and low oil prices affecting key corporate clients.

• 9MFY15: Growth mainly attributed to fire, motor, medical and travel classes ofbusinesses

Net Earned Premium• 3QFY15: Growth contributed by higher retention of motor business coupled with

higher release in premium liabilities in 3Q• 9MFY15: Growth mainly attributed to increase in fire, motor and travel classes of

businesses

Profit After Tax• 3QFY15: PAT was lower by RM2.0 mil over that of same period FY14 mainly due to

the tax benefit accrued in 3QFY14 arising from the cash call by MMIP• 9MFY15: 38.9% growth in PAT (excluding gain on disposal of building in 1QFY14)

driven by continuous growth in NEP offset by higher claims from motor, medical andalso MMIP

PROFIT AFTER TAX (excluding one-off)*

*Excluding one-off gain in 1Q2014

3Q2015

2.7 m -42.4%

9M2015

13.2 m +38.9%

9MFY15: Top line grew at a moderate pace in line with the industry, bottom line impacted by higher claims from MMIP, motor & medical

9M2015 Composition 9M2014 Composition3Q2015 Composition 3Q2014 Composition

yoy yoy

yoy yoy

yoy yoy

yoy yoy


3Q2015

54.8 k

Overseas Ventures

TOTAL POLICIES ISSUED (100%)

PROFIT AFTER TAX (49%)

Middle East

9M2015

161.1 k

3Q2015

0.2 m

9M2015

0.4 m

Middle East JV shows steady improvement while Thailand shows strain on PAT due to growth of motor business

Total Policies issued• 3QFY15 & 9MFY15: Total policies issued driven by continuous footprint expansion, new

product and channel launches, despite oil crisis in the Middle East

Profit After Tax• 3QFY15 & 9MFY15: PAT in line with the business expansion of travel footprint coupled with

release of UPR

Thailand (TIPCL only)

GROSS WRITTEN PREMIUM (100%)

PROFIT AFTER TAX (49%)

Gross Written Premium• 3QFY15 & 9MFY15: Healthy GWP driven by motor and travel businesses

Profit After Tax• 3QFY15 : Negative PAT mainly attributed to 1) higher commissions payout and new business

strain for motor business, 2) higher ME as a result of higher marketing & advertising cost, IT& personnel expenses

3Q2015

22.2 m

9M2015

45.8 m

3Q2015

(1.5 m)

9M2015

(0.5 m)


01Page 3 - 7

EXECUTIVE SUMMARY

• Key highlights • 9MFY15 – financial

highlights • Q3FY15 – financial

highlights • Key Strategies • Outlook




02Page 9 - 12


Indicators

03Page 14 - 18

A G E N D A


333.2 357.6

108.7 109.1

14.5

16.8

4.7 5.4

325.0 347.5

109.5 121.0

9M2014 9M2015 Q3FY14 Q3FY15

9M2014 9M2015 Q3FY14 Q3FY15

40.6% 41.1% 37.3% 36.8%

59.4% 58.9% 62.7% 63.2%

9M2014 9M2015 Q3FY14 Q3FY15

1 Net earned premium = gross earned premium received - premiums ceded to external reinsurers

217.8192.6 80.767.9

Online

TIMB

Tune Protect Group : Operating Revenue

9M2014 9M2015 Q3FY14 Q3FY15

OPERATING REVENUE (RM’ mil) GROSS WRITTEN PREMIUM (RM’ mil)

NET EARNED PREMIUMS1 (RM’ mil) INVESTMENT INCOME (RM’ mil)

9MFY15: Healthy growth in top line despite ongoing economic uncertainty in Malaysia


29.3% 25.6% 28.5% 24.4% 28.1% 31.2%

42.0%42.8%

48.2%46.7% 39.7% 37.0%

17.2%16.4%

17.8%17.6%

18.4% 15.5%

1 Management Expense divided by Net Earned Premiums 2 Sum of Net Claims, Management Expenses & Net Fees and Commissions divided by Net Earned Premiums

ME1

(%)

Combined ratio2

(%)

Net claim(%)

Commission(%)

88.5% 84.9% 94.6% 88.8% 86.2% 83.7%

9M2015 9M2014 Q3FY15 Q3FY14 Q1FY15 Q2FY15

Tune Protect Group: Combined ratio

9MFY15 Vs 9MFY14 – higher combined ratio of 3.6% attributed to• higher ME arising from higher royalty, rebranding expenses, employee related expenses including ESOS provision

Q3FY15 Vs Q3FY14 – higher combined ratio of 5.8% mainly due to• higher ME arising from higher royalty, rebranding expenses, employee related expenses including ESOS provision• higher claim % reported in TIMB due to MMIP

Q3FY15 Vs Q2FY15 –higher combined ratio despite lower ME ratio attributed to• higher net claim % due to MMIP• higher net commission % from travel, marine and fire class of businesses

15

9MFY15: Higher combined ratio mainly due to higher ME


47.752.0

13.316.9 17.2 17.2

9MFY15 Vs 9MFY14 – Flat underlying PAT (exclude gain from sale of building of RM4.3mil) attributed to • Growth in NEP mainly in fire, motor and travel class of businesses and recognition of unrealized foreign exchange gain of RM3.3m• Offset by decrease in investment income from TIMB and increase of claim due to MMIP and decrease of RM2.2mil in profit contribution from

associates

Q3FY15 Vs Q3FY14 – lower PAT of RM 3.6 mil due to • decrease of RM2 mil in TIMB mainly due to tax benefit arising from the cash call by MMIP in 3QFY14• decrease of RM2.8 mil in profit contribution from Thai associate• cushioned by higher NEP recorded from travel business especially in Malaysia

Q3FY15 Vs Q2FY15 – lower PAT of RM 3.9 mil underpinned by• Lower PAT from TIMB due to increase in net claims from MMIP and higher commission offset by increase in NEP of motor, medical, and marine and

increase in other income of MMIP.• decrease of share of profits of RM1.9 mil from Thai associate• cushioned by increase in travel due to recognition of unrealized foreign exchange gain

RM’mil

PAT

* Comprises of TPR & other subsidiaries

Tune Protect Group: Profit After Tax

9MFY15: Flat PAT underpinned by healthy travel performance offset by higher ME

16

9M2015 9M2014 Q3FY15 Q3FY14 Q1FY15 Q2FY15

PATQ3FY15 Q3FY14 9M2015 9M2014

(RM’mil) (RM’mil) (RM’mil) (RM’mil)

TPG & Others 15.7 11.7 26.3 23.0

Online* 16.5 12.3 45.9 40.7

TIMB 2.7 4.7 13.2 13.8

Share of associate (Thailand) (1.5) 2.0 (0.5) 2.3

Share of JV 0.2 0.1 0.4 0.1


0.9% 0.9%

2.7% 2.9%

Q3FY14 Q3FY15 9M2014 9M2015

Wholesale Funds, 76.2%

Tune Protect Group : Investment Portfolio & Income

Unit and property trust funds, 2.5%

PORTFOLIO MIX (9M2015)

Deposit with FI, 14.8%

Equity securities 2.1%

Loans, 0.1%

Higher investment income attributed to continued investment in tax exempt wholesale funds given the current economic climate

4.7 5.4

14.5 16.8

Q3FY14 Q3FY15 9M2014 9M2015

INVESTMENT INCOME (RM’ mil)

* Investment yield for 3 months & 9 months# Investment income (include rental income) /(total

investment+ total investment property)

INVESTMENT YIELD#

TPG Group579.6 mil

17

Debt securities, 4.3%

* *

**


U.A.E44% (57%)

India13% (14%)

Morocco12% (12%)

Egypt8% (6%)

Europe6% (5%)

Others16% (6%)

Malaysia 54% (51%)

Thailand 20% (18%)

Indonesia 9% (13%)

Singapore 4% (5%)

China5% (7%)

Others7% (7%)

Malaysia 53% (53%)

Thailand 21% (18%)

Indonesia 9% (11%)

Singapore 4% (5%)

China5% (7%)

Others8% (6%)

U.A.E50% (60%)

India15% (13%)

Morocco 10% (11%)

Egypt6% (5%)

Europe5% (5%)

Others14% (6%)

Malaysia54% (53%)

Thailand19% (16%)

Indonesia10% (13%)

Singapore4% (4%)

China6% (9%)

Others7% (6%)

U.A.E44% (57%)

India13% (14%)

Morocco 13% (12%)

Egypt8% (6%)

Europe6% (5%)

Others16% (7%)

U.A.E50% (59%)

India15% (14%)

Morocco 10% (11%)

Egypt6% (5%)

Europe5% (5%)

Others14% (6%)

Malaysia54% (49%)

Thailand20% (18%)

Indonesia 9% (13%)

Singapore 4% (4%)

China6% (8%)

Others7% (7%)

Travel Business (Asia & Middle East)

54.8 k in Q3 2015(vs. 55.8 k in Q3 2014)

161.1 k in 9M 2015(vs. 79.9k in 9M 2014)

2.01 million in Q3 2015(vs. 1.81 million in Q3 2014)

ASIA*

MENA & EU^

5.88 million in 9M 2015(vs. 6.04 million 9M 2014)

64.1 k in Q3 2015(vs. 54.0 k Q3 2014)

160.5 k in 9M 2015(vs. 69.1 k 9M 2014)

1.95 million in Q3 2015(vs. 1.76 million in Q3 2014)

6.03 million in 9M 2015(vs. 5.75 million in 9M 2014)

ASIA*

^ sold via AirArabia & Cozmo* sold via AirAsia & Cebu Pacific

2014 2015

MENA & EU^

POLICIES ISSUEDPOLICIES EARNED

Q3 9M Q3 9M

Q3 9M Q3 9M

18


This presentation has been prepared by Tune Protect Group Berhad (formerly known as Tune Ins HoldingsBerhad) (“Company”) in connection with the Interim Financial Statements (unaudited) for the financialperiod ended 30 September 2015 and announced by the Company on the Main Market of Bursa MalaysiaSecurities Berhad on 16 November 2015.

Information contained in this presentation is intended solely for your reference. Such information is subjectto change without notice, its accuracy is not guaranteed and it may not contain all material informationconcerning the Company. Neither we nor our advisors make any representation regarding, and assumes noresponsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any informationcontained herein.

In addition, the information may contain projections and forward-looking statements that reflect theCompany’s current views with respect to future events and financial performance. These views are based oncurrent assumptions which are subject to various risks factors and which may change over time. Noassurance can be given that future events will occur, that projections will be achieved, or that the Company’sassumptions are correct. Actual results may differ materially from those projected.

Disclaimer

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