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MNRB GROUP NET PROFIT RISE BY 34.0% IN Q1

26 Aug 2020

MNRB GROUP NET PROFIT RISE BY 34.0% IN Q1

Group maintains its resilience despite operating amidst a challenging landscape

Kuala Lumpur, 26 August 2020 – MNRB Holdings Berhad (MNRB) today reported a significant jump in its earnings for the first quarter ended 30 June 2020 (Q1 FY2021). The Group’s gross premiums and takaful contributions improved 3.7% to RM500.8 million in Q1 FY2021 as compared to RM483.5 million recorded in the same period last year. The Group also registered RM50.8 million in net profit, a 34.0% increase from RM37.9 million recorded previously.

“The start of Financial Year 2021 was indeed very challenging for us as we had to operate our business amidst the COVID-19 outbreak and the various stages of the Movement Control Order (MCO). Despite this, I am pleased to say that the Group managed to agilely manoeuvre the first quarter while dealing with the global pandemic. Overall, the Group remained resilient and delivered an improved result for the period under review”, said President & Group Chief Executive Officer of MNRB, Mohd Din Merican.

MNRB’s reinsurance subsidiary, Malaysian Re, recorded a 14.3% growth in its Gross Premium to RM323.8 million from RM283.3 million recorded in the same quarter of the preceding year. This was attributable to healthy business growth across its domestic and international conventional business portfolios as well as new products in line with its strategic Value Creation Plan. Malaysian Re’s net profit rose by 75.1% to RM35.2 million as compared to RM20.1 million in the same period last year, driven by lower management expenses, the absence of large loss events and higher investment income recorded for the quarter.

“Like most life insurers and family takaful operators, Takaful IKHLAS Family’s Gross Contribution was largely affected by the unprecedented COVID-19 outbreak and the limitations imposed by the MCO. The lower Gross Contribution resulted in lower wakalah fees which led to the dip in Takaful IKHLAS Family’s net profit for Q1 FY2021”, said Mohd Din.

Takaful IKHLAS Family recorded RM102.1 million in Gross Contribution for Q1 FY2021 as compared to RM135.6 million recorded in the same period last year. Its net profit declined to RM2.6 million from RM14.6 million recorded in the same period last year. Business started to pick up in June despite slower business growth in the months of April and May 2020 due to the MCO.

The Group’s general takaful arm, Takaful IKHLAS General, recorded RM76.4 million in Gross Contribution for Q1 FY2021 as compared to the RM64.2 million recorded in the same period last year. Takaful IKHLAS General’s net profit increased to RM7.1 million from RM5.7 million in the same period last year.

“The implementation of social distancing during the COVID-19 outbreak helped accelerate the use of technology amongst Malaysians in general. With our readily available online platform, Takaful IKHLAS was able to facilitate customer transactions smoothly throughout the MCO. This led to the increase in Takaful IKHLAS General’s Gross Contribution which was contributed mainly by the Fire and Motor segments. Takaful IKHLAS General also initiated its Motor Relief Measure for COVID-19 which benefited a total of 68,000 participants between 24 April 2020 and 23 June 2020”, added Mohd Din.

On investments, Q1 FY2021 saw MNRB Group’s net investment income rising 7.9% to RM172.9 million from RM160.3 million previously due to the higher fair value gains during the period. “We pursued a prudent asset management strategy and as a result we recorded a growth of RM0.28 billion in the Group’s total assets to RM9.49 billion in the first three (3) months of FY2021. We shall maintain a conservative investment portfolio and will continue to be selective in terms of our investment assets and equities moving forward, given the continuing volatility in markets”, said Mohd Din.

Commenting on MNRB Group’s strategies moving forward, Mohd Din said “We are determined to continue operating our business diligently amidst the current uncertain and challenging landscape. We shall continue to focus our efforts on implementing our Value Creation Plans to sustain the growth of the MNRB Group. One of our primary goals is to enhance our digital channels to ensure that our customers are able to reach us and attain our services effectively by virtual means. This should enable us to maintain our business momentum amidst the new normal”.