Review

• Allianz Malaysia Berhad’s (Allianz) 9MFY24 net profit of RM540.0mn came in within our expectations at 70.0% of our full-year forecasts and 70.1% of consensus estimates.

• Allianz’s 3Q24 net profit increased 9.7% QoQ to RM183.2mn, in tandem with higher revenue of RM1.4bn, up 5.1%. The decent performance can be attributed to higher insurance service and investment results. In addition, the general segment claims ratio improved to 64.7% versus 65.2% in 2Q24 (higher claims from fire and engineering large losses).

• Despite a 14.2% increase in revenue to RM4.2bn, 9M24 PBT improved by just 0.5%, reaching RM720.9mn due to higher profit contributions from the life insurance segment being offset by lower contributions from the general insurance segment.

• The life insurance segment registered a 6.8% YoY rise in PBT to RM341.7mn in 9M24, driven by higher contractual service margin and investment results. Gross written premiums increased by 9.2%, with growth from bancassurance (+ 29.4%) and employee benefits (+ 15.9%).

• However, 9M24 general business PBT declined 4.2% to RM388.1mn due to higher claims from the fire and engineering segment. As such, the claims ratio increased 4.9 pts to 64.3%. Positively, the gross written premium increased by 14.2% YoY to RM2.6bn, boosted by higher premiums stemming from the motor business (+18.2% YoY).

Impact

• No change to FY24-26 earnings projections pending more updates from an analyst briefing to be held later today.

Outlook

• We look forward to a stronger 4Q24 on the back of higher sales of investment-linked products with protection riders and also saving products. Management added that Allianz would continue to focus on driving profitable product mix and claims management.

Valuation

• We maintain our Hold recommendation on Allianz with an unchanged TP of RM21.30/share based on SOP valuation and a 3% ESG premium.

Source: TA Research - 25 Nov 2024