ALLIANZ TO FOCUS MORE ON NON-MOTOR
Insurer aims to achieve 35pc in Net Earned Premium contribution from segment next year
ALLIANZ Malaysia Bhd is diversifying its general insurance portfolio to non-motor protection coverage segments, in its bid to remain sustainable and relevant in the long term.
Chief executive officer Zakri Khir said the move would allow its general insurance unit, Allianz General Insurance Co (Malaysia) Bhd, to extract higher margins from various insurance products, including real-estate, individual and commercial protections.
“We find that the current motor insurance environment is not very sustainable for us. It has a lower margin and stiff competition, thus exposing us to various volatilities,” he told the New
Straits Times in an interview recently.
Zakri said Allianz General would embark on a transformation programme to achieve a 35 per cent Net Earned Premium
(NEP) contribution from the nonmotor and 65 per cent from the motor segment next year.
Currently, Allianz General’s NEP contribution is mainly derived from the motor segment — about 72 per cent with more than RM1.2 billion in turnover.
The remaining NEP is attained from the non-motor segment.
Zakri said the company aspired to rebalance its products portfolio with the potential expansion of the non-motor segment.
“This initiative would allow us to provide good dividends to our shareholders while improving the overall group’s earnings.
“We also want to achieve an average combined ratio of 90 per cent with the remaining 10 per cent of underwriting profit margins annually,” he added.
He said Allianz General’s core products that could drive its diversification include Smart Home Cover, Allianz Shield, Allianz Travel Care and Allianz Care.
Zakri also said the local general insurance market had remained flattish in the last two years, with 1.5 per cent growth in gross written premium last year and negative 0.1 per cent growth in 2017.
“Generally, Malaysians do not buy general insurance and the penetration rate is still low at 1.5 per cent of the gross domestic product, compared to developed countries such as Germany, with 3.4 per cent,” he added.