Allianz Malaysia Bhd. · MYX:ALLIANZ

Allianz Malaysia Bhd — Q1 2023 Earnings Presentation

42 slides from Allianz Malaysia Bhd's earnings presentation, May 30, 2023

  1. Slide 1: Allianz Malaysia Berhad Q1 2023 Financial Results Analyst Briefing

    ALLIANZ MALAYSIA BERHAD (197201000819) Q1 2023 FINANCIAL RESULTS MFRS 9/17 Analyst Briefing 30 May 2023 © Copyright Allianz Malaysia Berhad

  2. Slide 2: AMB Group Financial Results

    01 AMB GROUP FINANCIAL RESULTS © Copyright Allianz Malaysia Berhad 2

  3. Slide 3: Highlights 2022: Accelerated Results under MFRS 9/17

    HIGHLIGHTS 2022: ACCELERATED RESULTS UNDER MFRS 9/17 (31 DECEMBER 2022) Group General Insurance Life Insurance Gross Written Premium (RM’mil) 6,023.0 2,656.3 3,366.7 Insurance Revenue (RM’mil) 4,450.1 2,597.8 1,852.3 Profit Before Tax (RM’mil) (values in brackets based on MFRS 4) 873.6 (704.4) 515.4

  4. Slide 4: Shareholder's Equity Higher at Transition

    SHAREHOLDER’S EQUITY HIGHER AT TRANSITION Group balance sheet equity (RM’bil) 31 December 2022 Highlights 4.68 4.23 • Difference versus MFRS 4 mainly driven by difference in profit emergence in the life insurance business; Retained earnings • Higher retained earnings for general insurance business f

  5. Slide 5: Life Segment Profit Before Tax Changes

    LIFE SEGMENT PROFIT BEFORE TAX CHANGES Profit Before Tax (RM’mil) Profits under MFRS 17 against MFRS 4 31 December 2022 mainly due to: +90.3mn Acceleration of profit under MFRS 17 for investment-linked business Fair value impact on investment assets being recognised in OCI MFRS 4 Difference in Fair

  6. Slide 6: General Segment Profit Before Tax Changes

    GENERAL SEGMENT PROFIT BEFORE TAX CHANGES Profit Before Tax (RM’mil) 31 December 2022 Profits under MFRS 17 against MFRS 4 +52.8mn mainly due to: Higher PBT from discounting on claims due to higher interest rate. Others: Fair value impact on investment assets being recognised in FVPL, loss component

  7. Slide 7: Life Segment New Business Value Aligned to MFRS 17 Framework

    LIFE SEGMENT NEW BUSINESS VALUE ALIGNED TO MFRS 17 FRAMEWORK Value of new business (“VNB”) Highlights (RM’mil) 31 December 2022 MFRS 4 VNB ~8% 275 mil MFRS 4 KPI for new business value; basis for NBM NBM +88 mil Tax MFRS 9/17 view is before tax Difference in risk adjustment, valuation curve and -63

  8. Slide 8: General Segment Combined Ratio in Detail

    GENERAL SEGMENT COMBINED RATIO IN DETAIL Combined ratio (“CoR”) 31 December 2022 Highlights Similar or New topline: CoR calculation based on gross instead of net premiums earned lower level1 87.3% • Lower loss ratio due to discounting of current accident year claims 85.3% reserves • Secondary discou

  9. Slide 9: Financial Highlights 3M 2023

    FINANCIAL HIGHLIGHTS 3M 2023 Group General Insurance Life Insurance Gross Written Premium (RM’mil) 1,705.3 (+4.6%) 776.1 (+4.7%) 929.2 (+4.5%) Insurance Revenue (RM’mil) 1,161.4 (+9.2%) 661.5 (+8.1%) 499.9 (+10.8%) Profit Before Tax (RM’mil) 232.3 (+7.8%) 139.8 (+50.3%) 96.5 (-26.6%) Shareholders’ n

  10. Slide 10: Excellent Start into 2023

    EXCELLENT START INTO 2023 Comments Insurance revenue Profitability • Group insurance revenue of RM1.16 billion, an increase of • Group profit before tax of RM232.3 million, increased by 9.2% from RM1.06 billion in 2022 due to higher insurance 7.8% (3M 2022: RM215.5 million) due to higher profit reve

  11. Slide 11: Financial Highlights 3M 2023: Gross Written Premium

    FINANCIAL HIGHLIGHTS 3M 2023 Group General Insurance Gross Written Premium (“GWP”) (RM’mil) +4.6% +4.7% 741.4 776.1 1,705.3 1,630.2 3M 22 3M 23 Life Insurance +4.5% 929.2 888.8 3M 22 3M 23 3M 22 3M 23 © Copyright Allianz Malaysia Berhad 11

  12. Slide 12: Financial Highlights 3M 2023: PBT and PAT Drivers

    FINANCIAL HIGHLIGHTS 3M 2023 Profit Before Tax drivers (RM’mil) Profit After Tax drivers (RM’mil) +7.8% +14.8% 3M 22 General Life Investment 3M 23 3M 22 General Life Investment 3M 23 Insurance Insurance Holding Insurance Insurance Holding ∆ 3M 23/22 ∆ 3M 23/22 3M 2022 93.0 131.5 (9.0) 215.5 3M 2022

  13. Slide 13: Financial Overview

    FINANCIAL OVERVIEW MFRS 4 BASIS MFRS 9/17 BASIS 3 YEAR RM’mil 2020 2021 2022 CAGR 3M 2022 3M 2023 12M 2022 (2019-2022) Gross Written Premiums 5,305.2 5,689.6 6,021.7 6.9% 1,630.2 1,705.3 6,023.0 CSM Release N/A N/A N/A N/A 90.5 95.0 368.6 Expense Ratio (Non 32.9% 31.2% 29.6% 2.3 pts 27.7% 24.8% 26.3

  14. Slide 14: Summary of Unaudited Financial Results

    SUMMARY OF UNAUDITED FINANCIAL RESULTS RM’mil 3M 2022 3M 2023 23/22 % Insurance revenue 1,063.1 1,161.4 9.2% Claims and benefits (556.8) (543.1) (2.5%) Acquisition and administrative expenses (net) (269.8) (268.3) (0.6%) Reversal of losses/(Losses) on onerous contracts 6.9 (14.6) (>100%) Insurance

  15. Slide 15: General Business

    02 GENERAL BUSINESS © Copyright Allianz Malaysia Berhad 15

  16. Slide 16: General Business

    GENERAL BUSINESS Comments Gross written premiums Combined ratio • Gross written premium increased by 4.7% as compared to • Lower combined ratio by 4.2 pts driven by lower claims and prior year. expense ratio. Profitability Market growth • Higher profit before tax from higher insurance service result

  17. Slide 17: General Business: GWP Is 4.7% Higher Than Prior Year

    GENERAL BUSINESS: GWP IS 4.7% HIGHER THAN PRIOR YEAR Gross Written Premium (RM’mil) Distribution Channel & Portfolio Mix +4.7% Telemaketing 2.2% Agent 56.9% 776.1 741.4 Broker 8.8% Banca 1.5% Franchise 30.6% Fire 15.5% Marine 2.5% PA & Health 5.3% Total 776.1 Misc Motor 13.4% 63.3% 3M 22 3M 23 © Cop

  18. Slide 18: General Business: Growth in Investment Income

    GENERAL BUSINESS: GROWTH IN INVESTMENT INCOME Investment Return/ Net (re-)insurance finance expenses Portfolio Mix and Investment Yield (Annualised) (RM’mil) Portfolio Mix Investment Yield * +49.6% Deposit Unquoted 37.1 7.2% Unit Trust 19.2% 24.8 6.5 47.8 Total 42.8 5,915.5 3.3% 3.1% Corp Bond (3.9)

  19. Slide 19: General Business: Higher PBT from Higher Insurance Service Results

    GENERAL BUSINESS: HIGHER PBT FROM HIGHER INSURANCE SERVICE RESULTS Profit Before Tax (RM’mil) PBT Drivers (RM’mil) +50.3% 139.8 93.0 3M 22 Insurance Investment Others 3M 23 service return results 3M 2022 82.4 38.9 (28.3) 93.0 3M 2023 117.1 54.3 (31.6) 139.8 3M 22 3M 23 Change 34.7 15.4 (3.3) 46.8 ©

  20. Slide 20: General Business: Better Combined Ratio

    GENERAL BUSINESS: BETTER COMBINED RATIO DUE TO BETTER LOSS AND EXPENSE RATIO Combined Ratio -4.2 pts 88.4% 84.2% 27.7% 24.8% 60.7% * 59.4% * Discounting impact -1.7% Discounting impact -2.9% 3M 22 3M 23 Claims Ratio Expense Ratio * Include reinsurance results - reinsurance ratio 5.5% in 3M 22, 13.8%

  21. Slide 21: General Business: Financial Results at a Glance

    GENERAL BUSINESS: FINANCIAL RESULTS AT A GLANCE RM’mil 3M 2022 3M 2023 23/22 % Insurance revenue 612.1 661.5 8.1% Claims and benefits (337.9) (294.3) (12.9%) Acquisition and administrative expenses (net) (158.0) (151.5) (4.1%) Losses on onerous contracts (0.2) (7.4) >100% Reinsurance result (33.6)

  22. Slide 22: General Business: Performance Compared to Industry

    GENERAL BUSINESS: PERFORMANCE COMPARED TO INDUSTRY (JAN-MAR 2023) AGIC Industry 1 Takaful 1 KPIs 3M 2023 3M 2023 3M 2023 GWP growth 4.5% * 10.1% 19.9% Market Share (3M 2023) 2 13.3% Market Ranking (12M 2022) 3 No. 1 Notes: 1) Source: ISM Market PerformanceReport Jan-Mar 2023 (General Insurance & Gen

  23. Slide 23: Life Business

    03 LIFE BUSINESS © Copyright Allianz Malaysia Berhad 23

  24. Slide 24: Life Business

    LIFE BUSINESS Comments Gross written premiums Profitability • Gross written premiums grew by 4.5% from all key • Profit before tax of RM96.5 million (3M 2022: RM131.5 distribution channels. million), a reduction due to normalised claims experience from investment-linked protection business in curren

  25. Slide 25: Life Business: Y-o-Y Growth Driven by Single and Recurring Premium

    LIFE BUSINESS: Y-O-Y GROWTH DRIVEN BY SINGLE PREMIUM AND RECURRING PREMIUM Gross Written Premiums (“GWP”) (RM’mil) GWP Mix & Growth (%) (3M 2023) +4.5% Mix Single 929.2 Premium 888.8 24.3% Total 929.2 Recurring Premium 75.7% 703.7 679.5 Growth 7.7% 209.3 225.5 3.6% 3M 22 3M 23 Recurring Premium Sing

  26. Slide 26: Life Business: Growth in ANP Driven by All Key Distribution Channels

    LIFE BUSINESS: GROWTH IN ANP DRIVEN BY ALL KEY DISTRIBUTION CHANNELS Annualised New Premiums (“ANP”) (RM’mil) ANP Channel Mix (%) (3M 2023) +11.1% 163.4 Alternative Distribution/ 147.1 Bancassurance 31.2% 18.9 13.4 0.0 Growth +23.8% 0.0 51.0 Total 41.2 163.4 Agency 57.2% Growth +41.0% Growth +1.1% C

  27. Slide 27: Life Business (Agency): Focus on Profitable Regular Investment-Linked Products

    LIFE BUSINESS (AGENCY): CONTINUE FOCUS ON PROFITABLE REGULAR INVESTMENT-LINKED PRODUCTS Agency Annualised New Premiums (RM’mil) Agency Product Mix (%) (3M 2023) +1.1% By ANP By Policy Count 92.5 93.5 Traditional Traditional 31.3% 18.6% Total Total 93.5 20,001.0 54.2 92.2 64.2 Investment Investment 9

  28. Slide 28: Life Business: Investment-Linked with Protection Features Continues to Grow

    LIFE BUSINESS: INVESTMENT-LINKED WITH PROTECTION FEATURES CONTINUES TO GROW Annualised New Premiums (RM’mil) Gross Written Premiums (RM’mil) +24.4% +3.9% 91.8 509.8 73.8 490.7 3M 22 3M 23 3M 22 3M 23 © Copyright Allianz Malaysia Berhad 28

  29. Slide 29: Life Business: CSM Growth Good at 1.2%

    LIFE BUSINESS: CSM GROWTH GOOD AT 1.2% Contractual Service Margin (RM’mil) +1.2% 2,966.7 Economic and non- Expected economic factors Growth © Copyright Allianz Malaysia Berhad 29

  30. Slide 30: Life Business: Growth in Investment Income

    LIFE BUSINESS: GROWTH IN INVESTMENT INCOME Investment Return by funds Portfolio Mix and Investment Yield (LF+SHF) (%) (Annualised) (RM’mil) Portfolio Mix Investment Yield >100% Others Cash Loans 0.5% 5.9% 213.7 0.9% Equities 8.5% Govt Bonds 34.9 56.7% 83.6 178.8 5.0% 30.2 Corp Bonds 27.5% 53.4 2.2%

  31. Slide 31: Life Business: Financial Results at a Glance

    LIFE BUSINESS: FINANCIAL RESULTS AT A GLANCE RM’mil 3M 2022 3M 2023 23/22 % Insurance revenue 451.0 499.9 10.8% Claims and benefits (215.0) (248.8) 15.7% Acquisition and administrative expenses (net) (111.8) (116.8) 4.5% Reversal of losses/(Losses) on onerous contracts 7.1 (7.2) (>100%) Reinsurance

  32. Slide 32: Appendix

    Appendix

  33. Slide 33: Adoption of IFRS 17 (Insurance Contracts) Accounting Standards

    ADOPTION OF IFRS 17 (INSURANCE CONTRACTS) ACCOUNTING STANDARDS The Group adopted two key new accounting standards beginning 1 January 2023, Malaysian Financial Reporting Standards (“MFRS”) 17 ‘Insurance Contracts’ and MFRS 9 ‘Financial Instruments’. MFRS17 establishes principles for the recognition,

  34. Slide 34: Adoption of IFRS 17 (Insurance Contracts) Accounting Standards

    ADOPTION OF IFRS 17 (INSURANCE CONTRACTS) ACCOUNTING STANDARDS The general measurement model, also known as the building block approach, consists of the fulfillment cash flows and the contractual service margin. The fulfillment cash flows represent the risk-adjusted present value of an entity’s righ

  35. Slide 35: Adoption of IFRS 17 (Insurance Contracts) Accounting Standards

    ADOPTION OF IFRS 17 (INSURANCE CONTRACTS) ACCOUNTING STANDARDS The premium allocation approach is a simplified approach for the measurement of the liability of remaining coverage an entity may choose to use when the premium allocation approach provides a measurement which is not materially different

  36. Slide 36: Adoption of IFRS 17 (Insurance Contracts) Accounting Standards

    ADOPTION OF IFRS 17 (INSURANCE CONTRACTS) ACCOUNTING STANDARDS In the statement of financial position, deferred acquisition costs and insurance related receivables will no longer be presented separately but as part of the insurance liabilities. This change in presentation will lead to a reduction in

  37. Slide 37: Adoption of IFRS 17 (Insurance Contracts) Accounting Standards

    ADOPTION OF IFRS 17 (INSURANCE CONTRACTS) ACCOUNTING STANDARDS The Group continues to have unit-linked insurance contracts, which are contracts with significant insurance risk, e.g., via death or other insurance riders. The Group expects unit-linked insurance contracts to be eligible for the variabl

  38. Slide 38: Adoption of IFRS 9 (Financial Instruments) Accounting Standards

    ADOPTION OF IFRS 9 (FINANCIAL INSTRUMENTS) ACCOUNTING STANDARDS MFRS9 ‘Financial Instruments’ replaces MFRS139 ‘Financial Instruments: Recognition and Measurement’ on the classification and measurement of financial assets and financial liabilities and on hedge accounting, effective for annual period

  39. Slide 39: Adoption of IFRS 9 (Financial Instruments) Accounting Standards

    ADOPTION OF IFRS 9 (FINANCIAL INSTRUMENTS) ACCOUNTING STANDARDS The key changes to the Group’s accounting policies resulting from its adoption of MFRS 9 are summarised below. (i) Classification of financial assets and financial liabilities MFRS 9 retains but simplifies the mixed measurement model in

  40. Slide 40: Adoption of IFRS 9 (Financial Instruments) Accounting Standards

    ADOPTION OF IFRS 9 (FINANCIAL INSTRUMENTS) ACCOUNTING STANDARDS Under MFRS 9, impairment will be measured on each reporting date according to a three-stage ECL impairment model: Stage 1 – from initial recognition of a financial assets to the date on which the credit risk of the asset has increased s

  41. Slide 41: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION © Copyright Allianz Malaysia Berhad

  42. Slide 42: Disclaimer

    DISCLAIMER These assessments are, as always, subject to the disclaimer provided below. Cautionary Note Regarding Forward-Looking Statements The statements contained herein may include statements of future expectations and Union, (xi) changes in the policies of central banks and/or foreign government

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