Kuala Lumpur, 30 August 2019 – MNRB Holdings Berhad’s (MNRB) Q1 group net profit for the quarter ended 30 June 2019 (Q1 FY2020) rose 34.1% to RM37.9 million from RM28.3 million recorded in the same period last year. This came on the back of improvements by MNRB’s takaful businesses, Takaful Ikhlas Family Berhad (Takaful IKHLAS Family) (previously known as Takaful Ikhlas Berhad) and Takaful Ikhlas General Berhad (Takaful IKHLAS General).
In addition, MNRB’s funds under investment portfolio benefitted from the rally in the bond market and helped negate the rather flat equity market. As a result, MNRB experienced far less volatility and gained improving net asset values.
Takaful IKHLAS demonstrating strong developments
Takaful IKHLAS showed a 6.3% y-on-y improvement in its Gross Written Contribution (GWC) for Q1 FY2020, driven mostly by the family business. The family business recorded a GWC of RM135.6 million compared to RM128.2 million recorded in the same period last year while the GWC for its general business increased to RM64.2 million from RM59.7 million in Q1 FY2019.
The combined Takaful IKHLAS Family and Takaful IKHLAS General profit after tax (PAT) showed a significant increase of 197.4% from RM6.8 million in Q1 FY2019 to RM20.3 million in Q1 FY2020. The improvement in profit was driven by higher investment income, growth in regular products and lower management expenses.
Enhancing retail distribution
Takaful IKHLAS’ distribution continues to be driven by its strong agency network, accounting for 60% of its contribution for both the Family and General businesses. Takaful IKHLAS Family is continuing its focus on building its infrastructure to strengthen its agency network.
In addition, the bancatakaful channel continues to gain traction. On 7 August 2019, Takaful IKHLAS General launched its strategic bancatakaful partnership with CIMB Islamic Bank Berhad to provide general takaful products and solutions to the Bank’s customers across retail, SMEs and commercial segments. Takaful IKHLAS is also exploring deepening its relationships with current bank partners to introduce new family takaful products in the future in addition to the current credit and house owner products.
With regard to online distribution, Takaful IKHLAS General had also recently tied up with an insurtech company to offer a travel PA product through an online bus ticket aggregator. The partnership has enabled Takaful IKHLAS General to explore the introduction of tailored products to meet the specific needs of online customers. Takaful IKHLAS General is also exploring the use of web analytics in driving more business through its website, www.takaful-ikhlas.com.my.
Reinsurance: operating in a challenging environment
MNRB’s reinsurance subsidiary, Malaysian Reinsurance Berhad (Malaysian Re) recorded a net profit of RM20.1 million in Q1 FY2020 as compared to RM27.3 million recorded in the same period last year. Malaysian Re’s profit for the first quarter was affected by two large domestic losses which impacted the industry by as much as RM650 million. Being a major reinsurer for the domestic market, Malaysian Re’s loss expenses increased due to these large loss events.
Malaysian Re also registered a slightly lower Gross Written Premium from both the domestic and overseas market of RM283.3 million in Q1 FY2020 from RM289.2 million in the previous year.
Malaysian Re’s Expansion into international business
This quarter saw Malaysian Re venturing into new areas of business through diversification of its overseas portfolio. Malaysian Re had also embarked on developing partnerships for underwriting new products from the international market.
Strategies Moving Forward
“We remain cautiously optimistic and committed to establishing the long-term growth for the Group as a whole. We are optimistic that our strategic plans are on track for this Financial Year. Among them include the expansion of our domestic takaful distribution channels, development of innovative products and expansion of our international reinsurance and retakaful business”, said Mohd Din Merican, President & Group Chief Executive of MNRB.
MNRB Holdings Berhad is an investment holding company. Amongst its wholly owned subsidiaries are Malaysian Reinsurance Berhad, Takaful Ikhlas Family Berhad (formerly known as Takaful Ikhlas Berhad), Takaful Ikhlas General Berhad and Malaysian Re (Dubai) Ltd. MNRB is listed on the Main Market of the Bursa Malaysia Securities Berhad. For more information, please visit www.mnrb.com.my .