ALLIANZ: Insurer Posts Robust Performance Driven by Market Share Expansion and Strong Investment Income
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading Malaysian insurer is on a trajectory to solidify its position among the top three life insurers, driven by strong market share gains and anticipated robust investment income. The company recently reported solid 2Q25 results, with expectations for continued strong performance in 3Q25, affirming a positive outlook from investment analysts.
Performance Highlights
The insurer has demonstrated significant market share growth, with its general insurance segment reaching 15.1% (+1% year-on-year) and its life insurance segment expanding to 12.1% (+0.9% year-on-year). Notably, the life segment has outperformed industry averages across key distribution channels. Agency channel growth stood at +4.5%, bancassurance at -7.6%, and employee benefits at +13.3%, surpassing industry benchmarks of -7.6%, -10.1%, and +11.3% respectively. This robust performance is particularly evident in the agency channel, which is actively closing the gap with the top three players in terms of annualized new business premiums, partly due to the successful promotion of a new co-payment medical product.
Strategic Advantages and Risk Management
The insurer has also showcased superior risk management, particularly in its life business, which reported lower loss ratios for both investment-linked and traditional policies in 6M2025 (81.9% and 82.5% respectively), significantly below industry averages of 91.5% and 87.1%. Furthermore, the general insurance segment maintains minimal exposure to high-risk areas like Sabah, limiting potential flood-related losses to under RM5 million. The company’s net exposure to any general insurance event risk is capped at RM15 million, with claims beyond this threshold covered by reinsurance, effectively mitigating the financial impact of large claims.
Future Outlook and Recommendation
Looking ahead, the insurer is poised for a strong investment income in 3Q25. This positive forecast is underpinned by fair value gains in its securities portfolio, primarily from improved performance in the domestic equity market, and a quarter-to-date decline in the 10-year MGS yield, which is expected to enhance the valuation of its bond holdings. Investment analysts maintain a positive stance, reiterating a recommendation.
