| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM24.35 (+9.9%) |
| Last Traded | RM22.16 |
| Recommendation |
Leading insurer reports strong financial results for fiscal year 2025, significantly exceeding market expectations driven by robust performance across both its general and life insurance segments. The company’s net profit reached RM958.8 million, surpassing both the investment bank’s and consensus full-year forecasts by 104.8% and 111.5%, respectively.
The commendable performance saw FY25 net profit climb 24.4% year-on-year, outpacing a 10.4% rise in revenue to RM6.2 billion. This growth was primarily fueled by enhanced contributions from both insurance divisions and a lower effective tax rate of 17.7%.
Segmental Performance Highlights
Within the general insurance segment, profit before tax (PBT) expanded by 16.1% to RM624.7 million. This was largely due to an improved claims experience within the fire portfolio, coupled with higher net insurance and investment income. Motor premiums also saw an 8.4% increase, supported by strong renewal rates and an effective agency channel. Consequently, the segment’s combined ratio improved by 0.9 percentage points to 87.9%.
Similarly, the life insurance segment recorded a 13.0% year-on-year increase in PBT, reaching RM544.8 million. This was attributable to higher net insurance and investment results from investment-linked protection and employee benefits. A strategic conversion campaign, which encouraged customers to switch to new medical plans with copayment features, also played a role in improving the loss ratio.
For the fourth quarter of 2025, net profit surged 27.1% quarter-on-quarter to RM297.5 million, primarily benefiting from tax credits that resulted in a positive tax position for the period.
Outlook and Recommendation
Looking ahead to 2026, the company anticipates maintaining resilient growth across both its life and general insurance businesses. Management aims for sustainable expansion and continues to proactively manage medical inflation to ensure a stable and healthy health loss ratio. Following these strong results, analysts have raised their FY26/27 earnings estimates by 2.7% and 2.3%, respectively.
TA Securities maintains a BUY recommendation on the company, setting a target price of RM24.35 per share, representing a 9.9% upside from its last traded price of RM22.16.
