PETALING JAYA: Manulife Holdings Bhd
expects recent positive momentum in its business to sustain and the insurance provider is eyeing for stronger growth in the near to medium-term.
The group, operating in the conventional life segment, is also looking to further capitalise on opportunities in the small and medium enterprise (SME) segment.
The group, which has a 61-year presence in Malaysia, is the eighth biggest conventional life insurer in the local market.
“In the last eight to 10 years, we have moved up from 12th to eighth position in the industry. How we managed to do this is by growing almost twice the conventional market (rate).
“We are quite confident about sustaining this growth,” group chief executive officer and executive director Vibha Hamsi Coburn told StarBiz.
The group has three core business segments: life insurance, asset management and investment holding.
The life insurance segment is the main driver of the group (78.3% of financial year 2023 or FY23 group revenue) followed by the asset management business (18.1%) while the investment holding contributes to a small fraction (3.6%) of the group’s revenue.
The group is also looking out for other potential corporate partnerships following its recent success with Alliance Bank Malaysia Bhd (ABMB).
“We have renewed our partnership with ABMB in August 2023 after some 15 years of relationship. This has been working very well for us.
“While for SMEs, they are underinsured presently.
“The segment employed almost 50% of workers in Malaysia, but we estimate 50% of the SMEs are uninsured and only 15% are actually insured for the amount they need to be insured at,” Vibha said.
Apart from the SME space, MIB is also looking to tap further growth in the Generation Z (Gen Z) segment.
“This is the other segment we are strongly focused on. Surveys in Asia have indicated that they are very concerned about medical insurance. We have launched a very simple and affordable entry-level product which is targeted at Gen Z,” she said.
“It is a matter of habit, as peopel ensure that they have health or life insurance, they would hopefully scale up as they progress in life and the sum insured can go up as well,” Vibha added.
Apart from this, she highlighted that the group is also the sole insurer that provides US dollar denominated life insurance in the country.
“We have the offshore entity in Labuan. We just launched an indexed universal life product – we are seeing strong interest for this from brokers and banks alike,” she said.The group’s financials had shown an improvement in the financial year ended Dec 31, 2023 (FY23) as it recorded a net profit of RM77.8mil following a year-on-year (y-o-y) dip in FY22 from a historic high in FY21.
FY22 had seen its net profit falling y-o-y by 78% due to lower realised gains from equity securities and unfavourable asset value net of insurance contract liability movement as a result of an increase in the interest rate.
As for FY21, which was the year the Covid-19 pandemic hit strongly, it also saw the group recording a big jump in net profit to a record high by 124% y-o-y to RM86.96mil.
“The pandemic was very interesting, it created the need and an awareness in people – even those who weren’t insured in health coverage before had started exploring these products more than anything else.
“And based on these elements coupled with the present low insurance penetration rate, we feel very optimistic of keeping the momentum going,” Vibha noted.
“Our profits are composed of two key areas - one is the core business profits and the other one is investment returns. So investments can be a bit volatile, if interest rates goes up, our fixed income portfolio goes down etc.
“Excluding this part (investments), we expect to keep the core momentum going,” she added.
She noted on the strong momentum in the asset management business, of which, this segment saw flows doubling y-o-y in the first quarter of this year.
Commenting on the recent rise in medical insurance premiums that was seen in the industry earlier this year, Vibha said this was necessary as claims had grown as well.
“You’ve seen (our) insurance profits grow by what you don’t know is that our claims grew by 24% last year as the group ended paying RM198mil in claims.
“Yes, while this is our core purpose, but then medical inflation has been growing at 12% to 16% in the last five years, which in other words show that medical costs double every six years - this is what it basically means,” she said.
“So medical premiums have to go up as we need to sustain our business also so we can keep our promise to our shareholders and policyholders.
“We find medical inflation is being driven by technology advances in medicine, and general inflation such as staff costs in hospitals,” she added.
Vibha said the recent move by Bank Negara for insurers and takaful operators to mandatorily introduce a co-payment (co-pay) option is a good step for the industry’s sustainability moving forward.
“We are very much supportive of this, as what ends up happening is that it becomes more affordable since these co-pay policies are cheaper.
“Instead of not having any insurance coverage altogether, at least a person can have the option to get a cheaper medical policy with a co-pay option with this mandatory clause,” she said.
“It will also help to contain the overutilisation of medical services as it provides more opportunities for people to be protected,” Vibha added.
