KUALA LUMPUR (June 21): Allianz Malaysia Bhd (KL:ALLIANZ) aims to sustain its earnings and business growth after the life and general insurance provider posted a record annual net profit and dividend for the financial year ended March 31, 2023 (FY2023).

“In terms of how sustainable [our performance] — I need it to be really clear that it is not a one-off and I hope it won't be a one-off,” Allianz Malaysia chief executive officer Sean Wang said in a press conference after the group’s annual general meeting on Thursday. 

The strong performance in FY2023 is not a result of a single year's effort, Wang said. Allianz, whose share price has grown nearly 20% year-to-date, is always focusing on medium to long-term return, he noted.

“What we see today is not one of two things that we have done in that particular year. It is a results of many years' good planning and execution,” he said.

In FY2023, Allianz Malaysia’s net profit grew 19.1% to RM730.91 million from RM613.67 million in FY2022, as revenue expanded 11.83% to RM4.94 billion from RM4.42 billion.

Allianz paid a dividend of 100.5 sen per share and 120.6 sen per irredeemable convertible preference share (ICPS) for FY2023, up from 85 sen per share and 102 sen per ICPS in FY2022.

This marked the first time that the group's ordinary shares had breached 100 sen, with a total dividend payout amounting to RM381.75 million, according to the group's 2023 annual report.

Meanwhile, its latest net profit for the three months ended March 31, 2024 (1QFY2024) rose 9.93% to RM189.83 million from RM172.69 million a year earlier, mainly due to higher profit contribution from the life insurance segment.

Revenue for the quarter grew 15.12% to RM1.34 billion against RM1.16 billion, on the back higher insurance revenue from both insurance segments — general and life insurance.

Allianz Malaysia had on June 12 paid a first interim dividend of 26.5 sen per share and 31.8 sen per irredeemable convertible preference share (ICPS) for FY2024.

Wang said the ongoing liberalisation of the motor segment has not eroded the group’s profit margin so far, since it was first introduced in July 2017.

Allianz Malaysia is progressing smoothly with phase 2A of liberalisation, which is nearing completion from the total three phases that is expected to be introduced, according to Wang.

“Up until this point, whether I see any margin erosion — not really because we have embarked on this journey from phase 1A — so [there will be] three phases — and so far, so good,” he explained.

Bank Negara Malaysia (BNM) had in July 2017 started to liberalise the commonly charged fixed premiums on motor vehicles — which accounts for a large chunk of the insurance market as the coverage is mandatory in Malaysia — to allow insurers to price their coverage based on risk behaviours.

“If we don't have the [profit] margin, we would not invest in all these Road Rangers (free services to policyholders in the event of an accident). So this itself can let you have a bit of comfort that we are very vigilant when it comes to this [motor insurance coverage],” he noted.

Allianz Malaysia’s general insurance segment rose 13.6% in 1QFY2024, higher than industry growth of 10%, according to its latest financial statement.

Meanwhile, its life insurance segment's annualised new business increased by 43.8%, outperforming the industry growth of 22.4%, with its 11.8% market share mainly contributed by agency and bancassurance business.

Shares of Allianz Malaysia finished eight sen or 0.4% higher at RM21.96 on Thursday, valuing the group at RM3.91 billion.