KUALA LUMPUR: Etiqa International Holdings Sdn Bhd is optimistic on its outlook next year with hopes of achieving a pre-tax profit of RM1bil in the financial year ending Dec 31, 2023 (FY23).
“We shouldn’t be too far from (achieving) RM1bil (based on an annualised basis),” group chief executive officer Kamaludin Ahmad said at Etiqa media briefing yesterday.
Etiqa is Malayan Banking Bhd
’s insurance and takaful arm.
In the first half of FY23, the insurer posted a pre-tax profit of RM503.9mil, which was a 114.5% year-on-year (y-o-y) jump.
This has already surpassed its 2022 full fiscal year pre-tax profit of RM472mil, which declined 48% y-o-y from RM907.6mil in FY21, dragged down by its operations in Singapore, which were hit by volatile investment market conditions.
“Our business is split evenly between life and general insurance. For life insurance business, our profit emerges over a longer period of time while general insurance is more immediate.
“For life insurance, we collect a lot of funds because we collect premiums and then we invest. The movement in the market can have an impact on our profitability.
“This is where the swing can come from. On the general insurance side, it is a lot more stable in terms of premiums and profitability.
“But we are not worried (about the swing in profits). This is the nature of the business. As long as we have good, quality businesses, it will continue to go upwards,” Kamaludin added.
Etiqa, which has operations in Malaysia, Singapore, Cambodia, the Philippines and Indonesia, saw total gross written premium (GWP) declined 3.3% y-o-y to RM11.09bil in FY22 from RM11.47bil in FY21.
The decline in GWP marked the company’s first having successfully achieved GWP growth for five consecutive years mainly due to a restructuring of its products in Singapore.
Its GWP in the first half of FY23 came in at RM5.5bil, which is a 7.5% decline y-o-y.
In March, Kamaludin reportedly said it foresees Etiqa’s gross premiums growing more than 10% this year.
He believes Etiqa’s strength and reputation in the general insurance market will help it cross-sell life insurance products.
“General insurance, quite a large proportion, is mandatory, for instance you must buy car insurance.
“We try to get people to know of us through general insurance, motor insurance and travel insurance, where we don’t have to sell aggressively as we are quite well known.
“We hope with our good service, for instance, roadside assist and money back incentives, when they think of buying more ‘difficult’ products like life insurance, they will come to us,” Kamaludin said.
He added that Etiqa is still No. 1 in terms of general insurance (combined with general takaful).
“We did RM3.7bil in Malaysia last year compared with our next highest competitor, Allianz Malaysia, which did around RM2.4bil,” he shared.
Etiqa also targets to be the leading insurer in Asean by moving back to the third position next year in terms of gross premiums from fifth position currently.
