MNRB DELIVERS AN IMPROVED PERFORMANCE IN FY2020
Gross Premiums/Contributions Rise by 15% and Net Profits by 27%
Kuala Lumpur, 29 June 2020 – MNRB Holdings Berhad (MNRB) today reported higher earnings for the financial year ended 31 March 2020 (FY2020). The Group delivered an improved business performance with a 15.0% increase in gross premiums and takaful contributions to RM2.3 billion as compared to the RM2.0 billion recorded in the last financial year. MNRB’s Group net profit rose 27.1% to RM132.7 million in FY2020 from RM104.4 million previously.
Commenting on the Group’s performance, President & Group Chief Executive Officer of MNRB, Mohd Din Merican said, “Our improved results are attributable to the robust performances of our operating subsidiaries, namely Malaysian Reinsurance Berhad (Malaysian Re), Takaful Ikhlas Family Berhad (Takaful IKHLAS Family) and Takaful Ikhlas General Berhad (Takaful IKHLAS General)”.
MNRB’s reinsurance subsidiary, Malaysian Re, recorded 18.2% growth in gross premiums to RM1.3 billion from RM1.1 billion previously. This growth was driven by positive impact from non-traditional sources, namely its participation in Binders and Lloyd’s Syndicate, growth in the Agriculture business, as well as higher premiums recorded across business regions during the period. The improved performance of its International portfolio combined with enhanced operational efficiencies drove down expenses across its business operations. This led to a 15.0% increase in Malaysian Re’s net profit to RM96.4 million in FY2020 from RM83.8 million previously.
FY2020 saw Malaysian Re posting its highest net profit in five years. This was achieved despite operating in a challenging business environment in which Malaysian Re was affected by a series of large domestic fire losses and lower investment income.
Meanwhile, the gross contribution for the Group’s takaful business under Takaful IKHLAS increased by 11.6% to RM963.8 million from the RM863.4 million recorded in the same period last year. This improvement was contributed mainly by the Bancatakaful segment for both its Family and General takaful businesses which registered consistent growth throughout FY2020. “Our Bancatakaful segment garnered double digit growth by the end of FY2020 as a result of strong credit-related contributions through the Mortgage Reduction Term Takaful (MRTT) and Group Credit Term Takaful (GCTT) segments as well as Fire and Personal Accident (PA) contributions from our strategic Bancatakaful partnerships,” added Mohd Din.
Takaful IKHLAS also contributed significantly to the Group’s net profit in FY2020. Its net profit surged 82.5% to RM64.6 million from RM35.4 million in the previous financial year due to business growth, improved net investment income and effective cost containment initiatives. This represents the highest ever net profit for Takaful IKHLAS since its inception in 2003.
On the investment side, MNRB’s Group net investment income increased 3.8% to RM360.7 million in FY2020 from RM347.5 million previously, while its total assets stood at RM9.2 billion as compared to RM8.7 billion in the previous financial year. The Group’s investment income improved throughout the financial year, mainly due to the fair value gains in corporate and government bonds/sukuk. However, in the final quarter of the financial year, the Group’s investment income was adversely affected by the volatility in the financial markets.
Takaful IKHLAS recorded higher net investment income of RM261.4 million against FY2019’s RM250.6 million. Malaysian Re on the other hand, recorded lower net investment income of RM99.8 million in FY2020 against the RM113.2 million previously due to a significant deterioration in the market value of equities.
“As we continue to operate our business under uncertain circumstances, we remain cautiously optimistic about establishing long-term growth for the Group as a whole. We will also continue to provide innovative protection solutions to the various market segments in line with the MNRB Group’s vision of ‘We Protect Everyone,’ said Mohd Din.
“The COVID-19 pandemic had indisputably presented an era-defining challenge to the global economy as a whole and imposed its own sets of challenges to our business. In overcoming these challenges, one of our main objectives is to enhance our digital channels to ensure customers are able to reach us and attain our services effectively by virtual means,” he added.
Pursuant to this, Takaful IKHLAS Family recently launched two new products, namely IKHLAS Bersama and IKHLAS Dariku through its social media platforms. IKHLAS Bersama is an all-in-one affordable protection solution, while IKHLAS Dariku focuses on providing Hibah as a gift. Both products offer comprehensive plans and flexible coverage terms that can be tailored to customers’ specific needs.