Outstanding net insurance service result driven by Travel segment
“Overall, the Group’s financial performance in 4Q24 and FY24 was commendable. We registered RM9.5 million PAT for 4Q24 and RM2.7 million for FY24 which signalled a strong recovery trend for the Group,” said How.
The Group’s profits were led by notable growth in net insurance service results, driven by the Travel segment. Net insurance service result for 4Q24 increased 82.8% Quarter-on-Quarter (“QoQ”) to RM11.1 million, and more than 100% YoY to RM3.0 million for FY24. This strong performance was mainly attributable to improvement in our acquisition cost due to changes in our portfolio mix, as well as lower reinsurance ratio.
“Although insurance revenue increased significantly YoY, it declined marginally by 1.2% QoQ to RM99.0 million in 4Q24. Excluding the RM43.6 million Tenang impairment in 4Q23, insurance revenue growth remained strong at 14.2% YoY. PAT increased by over 100%, driven by topline growth, lower reinsurance premiums, lower attributable expenses, and lower tax provisions,” said How.
Enhanced cost efficiency led to improved combined ratio
Another highlight was the Group’s combined ratio which improved YoY and QoQ in 4Q24. More impressively, even without the impact of Tenang1 scheme impairment, the Group’s combined ratio still managed to improve YoY. Excluding the impairment, 4Q23 combined ratio would have been at 95.5%, representing a 6.8 percentage points improvement.
FY24 results were commendable, with insurance revenue increasing YoY by 4.0% to RM389.2 million and net insurance service result improving YoY at RM3.0 million compared to a loss of RM9.0 million in FY23. The solid improvement of FY24 PAT of RM2.7 million was encouraged by over 100% growth in net insurance service result despite lower investment income due to market volatility and the negative share of results of RM6.6 million from Tune Protect Thailand’s (“TPT”) impairment related to claims recovery.
“We also achieved a combined ratio of less than 100% and lower by 3.2% YoY in FY24. Combined ratio continues to improve due to better cost efficiency and lower reinsurance ratio. This was primarily driven by higher insurance revenue supported by growth in travel, lower allocation of reinsurance premiums in line with our strategy to exit from the large Commercial segment and lower attributable expenses (management expenses) compensating higher claims from Motor and Fire for the year. Higher net incurred claims and attributable expenses ratio which increased 6.7% YoY were mainly due to four large Fire losses in 2024 and higher Motor losses recorded in the year,” said How.
PBT to normalise after one-off losses
According to the Group, the key events affecting Profit Before Tax (“PBT”) in FY24 were mostly one-off occurrences. Excluding the one-off occurrences, the Group’s PBT would have been RM16.1 million. The Group does not anticipate any future recurrences that would impact the earnings.
“These one-off events included the Group’s exposure to four large Fire losses. The frequency of these large claims was higher than previous years and we expect it to normalise moving forward. Another key event was impairment losses on intangible asset from our digital life insurance entity (Tune Protect Ventures) in 2Q24. Digital life traction was slower than anticipated while the health business can be offered via Tune Protect Malaysia (“TPM”),” said How.
Another key event was TPT’s impairment related to claims recovery in relation to a PA Account which was fully taken up during 2Q24.
Stabilised investment with portfolio rebalancing
The Group’s investment performance stabilised although it declined slightly YoY to RM30.0 million due to market volatility amid a hawkish Fed and the uncertainties of the US policy following Trump’s ascension.
“We continue to maintain a largely conservative investment strategy. During 4Q24, we completed the rebalancing of our portfolio into investment in Low-Risk Unit Trust funds which are predominantly invested in Malaysian Government Securities, Government Investment Issues and Government Guaranteed Corporate Bonds,” said How.
Strong momentum in Travel driving growth
The Group’s key growth focus for the Travel segment in 2025 will be based on the three main pillars of expanding market presence, becoming a travel centre of excellence and going beyond insurance for travel experience.
Aligning to these three main pillars, the Group has already made encouraging progress in 4Q24 when it expanded inbound travel for 10 new markets where the benefits and claims payout reflect the departure country currency for markets such as Australia, India, Japan, Brunei, and Taiwan, among others.
“We have also been aggressively recruiting top travel agents of our key airline partner in Malaysia, and expanding our distribution partners by onboarding four online brokers in Thailand, and four new Online Travel Agencies (“OTAs”) in Thailand and Indonesia for distribution of Travel Insurance in these markets. Besides activating new markets and establishing our network with new partners, we have also rolled out the Delay Lounge Pass in most markets in Asia through our airline partner to provide customers the convenience of airport lounges during flight delays, and we’re planning to expand it to other markets beyond Asia,” said How.
Managing Motor mix portfolio and claims
The Group is committed to managing Claims and Motor mix within the preferred and profitable segments. Other than focusing on the Travel segment, the Group remains vigilant in managing its Motor business through pricing optimisation, portfolio mix improvement and claims management. The Group’s strategy aims to align the Motor claims ratio at par with industry standards and is expecting favourable impact in Motor claims going forward.
“Our strategy aims to improve loss ratio and align the Motor performance with industry standards, with the expectation of favourable impact on the overall Motor claims ratio in 2025. We are planning to gradually increase the portfolio mix for the segment with a better loss ratio,” said How.
Moving forward
In pursuit of deepening its foray in the global travel ecosystem, Tune Protect will continue to elevate its inbound travel products offering with ongoing enhancements to product features, pricing, and benefits to optimise revenue opportunities. To further strengthen its airline partnerships, the Group is enhancing airline platforms and introducing improved products with better benefits, aiming to increase take-up rates among airline partners. Additionally, the Group is also going deeper into the travel ecosystem targeting regional players such as travel agencies, hotel chains, cruises, event organisers, and ticketing platforms.
In line with its growth strategy, Tune Protect is extending its market reach beyond Malaysia, expanding airline travel agent partnerships in Thailand, China, and other key markets. Tune Protect plans to roll out its Delay Lounge Pass services to new regions and exploring innovative bundling opportunities, such as bite-sized Flight Delay Insurance integrated with airline corporate programs. To further enhance traveller experience, Tune Protect is identifying new travel-related value-added services such as eSIMs in the coming quarters.These strategic initiatives reaffirm the Group’s commitment to delivering comprehensive and innovative travel insurance solutions to a global audience.
“Our strategic focus will continue to emphasise on the expansion of our travel insurance products and other profitable business segments while focusing on our cost and claims management. By leveraging on our expertise and innovative methodologies, we aim to identify and capitalise on new market opportunities and thereby achieving a sustainable growth,” How concluded.
1The Tenang scheme was a financial aid programme introduced by the Malaysian government to offer simple and affordable insurance plans to the lower income group. The scheme was discontinued in FY23.
