Tune Protect Group Berhad started its new financial year on a strong footing by posting solid growth for Net Written Premiums (“NWP”). NWP rose by 37.2% year-on-year (“YoY”) to touch RM 82.3 million.
Rohit Nambiar Chief Executive Officer said, “The Group’s 1Q22 performance is evidence of a positive post-lockdown recovery and a testament to our 2021-2023 strategy in action. However, we are impacted by the difficult investment climate, and we will continue to watch it closely with a focus on a more conservative approach.”
Net investment loss improved YoY, but it continued to record fair value losses. Our share of results from the Group’s associate company, Tune Protect Thailand was impacted by claims arising from the effects of Covid.
Another positive development in 1Q22 was the improvement in retention ratio in the Group’s preferred segments, i.e., Health, Lifestyle, and SME, in line with its strategy to achieve retention upwards of 70% for the Group’s Lines of Business (“LOB”). The overall retention ratio increased 6% YoY to 60%, with Health and Lifestyle exceeding the target by recording 98% and 85% retention respectively.
The NWP growth of 37.2% YoY is the highest quarterly NWP since 2016 and this was led by the Group’s Lifestyle pillar, particularly in the PA and Motor segments which recorded an increase of RM11.2 million and RM9.5 million respectively. The PA segment which was driven by the Group’s Tenang PA Care contributed close to 50% of the Lifestyle NWP growth generated through digital and other partners. Tenang PA Care was launched in February this year and is aligned with the Group’s ESG commitment to supporting the B40 segment. The Group had also reduced its Hull portfolio as planned in 1Q22.
“We anticipate growth in the Health pillar with the upcoming launch of a new critical illness product slated for 3Q22. Commercial pillar will continue to taper as per our plan to exit the Aviation and Hull business,” said Rohit.
Growth amid market volatility
The Group’s performance in 1Q22 was commendable given the persistent market volatility in 1Q22. On 4 May 2022, the US Federal Reserve (“Fed”) announced a rate hike of 0.5% and guided that it would begin quantitative tightening on 1 June 2022 to combat rising inflation. Risk appetite across almost all major asset classes, whether it be bond or equities have been affected by the bearish US treasuries market and a hawkish Fed. Consequently, it is anticipated that the current risk-off sentiments will continue to dominate the market.
“Moving forward, any recovery in both the bond and equity markets is only expected to happen once the impact of the Russian-Ukraine conflict dissipates and the aggressiveness of the Fed is clarified and priced in fully, most likely in 2H22. In the meantime, our portfolio remains on the defensive and is shielded from extreme volatility as we have reduced our overall fixed income duration to around 3 years,” said Rohit.
On a positive note, the Group’s various strategic partnerships have started to yield strong results and NWP contribution. NWP contribution from digital partnerships and eCommerce grew YoY from RM29.3 million in 1Q21 to RM39.2 million in 1Q22.
