TPL Insurance Limited
Analyst Briefing
Dated: 26th September 2023
1
Market Updates - YTD June 2023
- PKR depreciated 27.6% during the six month period at Rs. 286 per USD (31st Dec 2022: Rs. 224.14 per USD) with further devaluation post period end challenging the insurance market on;
- Inflated Claims costs through out policy periods
- Maintaining expense ratio
- Making reinsurance payments abroad
- Volumes of auto industry are down by 51%, marine business is also affected due to strict fiscal and exchange measures
- Opportunities to increase premiums due to revaluation of assets mainly in the corporate segment
- Pakistan's Insurance industry is struggling in arranging Reinsurance capacities mainly because of;
- International pressures on reinsurance business due to global losses,
- Losses reported in Pakistan's Insurance Industry in past 2 years resulting in tightening on coinsurance business
- Capacities are available in PKR and have not increased with PKR devaluation whereas sum insured values of insurable risks have increased significantly
- New product development and digitization is being encouraged by the regulator to improve insurance literacy and adoption in Pakistan
2
Motor Retail Segment
H o w d e c l i n e i n a u to i n d u st r y i m pa c t i ng o u r b u s i n ess ?
Auto Industry Sales - HY22 vs 23
Motor Fresh
New vs Old Cars
3,8853,686
CARS- 77%
Premium
350.3
62%
71%
2,536
Honda -78%
223
273.3
38%
Toyota -75%
Suzuki -78%
Hyundai -52%
172
127 102
2022 2023 New Old Total
29%
2022 | 2023 | |||
New | Old | |||
1,349
New | Old | |||
2022 | 2023 | |||
SUVs / LCVs | - 38% |
BIKES- 37%
Auto industry is overall 51% down due to import curbs, high KIBOR & PKR devaluation
Comments:
- Auto industry volume shrunk by 51% impacting TPLI retail segment by 37%
- TPLI is focusing on old cars and as a result 71% volume came from old cars vs 38% in HY2022
- Number of old cars increased by over 40% (compared to HY22)
- Average sum insured of old cars have increased by 21% & of new cars increased by 59% (compared with HY22)
Banks
H o w a r e w e d i ve r si f y i ng o u r b u s i ne ss w i t h B a n k s?
Decline in Auto Financing (HY22 vs HY23)
# of Units | - 77% |
Financing Amount | - 73% |
Source: Financing by banking industry
Renewal of Portfolio
Renewals target is achieved @ over 100% and we are in discussion with banks for other rollover portfolios
Sum Insured Revision
Revising sum insured for FIG customers after concurrence with banks - PKR 16 million and campaign is ongoing.
New Auto Relationships | |
Auto Financing portfolio | - PKR 2.3million |
Commercial Vehicles | - PKR 2 million |
New Products with banks (concluded) | |
Cyber Liability | - PKR 26million |
Fixed Assets & Plastic Cards | - PKR 1.5million |
Account Holder Health | - PKR 12 million |
Wallet Insurance | - PKR 14 million |
Agreements in pipeline
Solar, Bike and Mobile
Personal Cyber
Card Alliances
Business Solutions
L e ve r a gi ng n e w c h a n n el s to g r o w t h e b u s i ne ss?
Agri Insurance
- Launched Pakistan's 1st Cattle Insurance based on Cattle Fattening Model with an AMC. In the first phase, 650 animals were insured with TPL Insurance.
- Reactivated Tractor Insurance through an Islamic bank and expanding it to other banks. Profitable segment with loss ratio of less than 10%
- Generated PKR 10 million in CLIS
- Launched 2nd pilot for Area Yield Index Insurance with (PKR 19m)
- AYII of Private Farm - PKR 5m.
Broker Business
- Expanding our relationship with brokers; resulting in 50% growth in Fire Business YOY
- Increased our Motor portfolio and on track on achieve higher than budgeted numbers
Challenges:
- Excused Health accounts (PKR 80mn premium) because of high losses.
- Focusing on Small and Medium Health Accounts; resulting in a better loss ratio (approx. 80%)
- Treaty limits revised downward for CI business resulting in reduced capacity to underwrite risk
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