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Tune Protect Q2 earnings down by half

KUALA LUMPUR: Tune Protect Group Bhd saw its earnings fall by half to RM13mil in the second quarter ended June 30, 2017 from RM26.47mil a year ago as it affected by higher motor claims cost and subdued digital gobal travel.

The insurer said on Friday there were larger than expected increases in motor claims cost that emerged in the middle of the first quarter of 2017.

Secondly, the subdued top line of its digital global travel, resulting from the Malaysian Aviation Commission's opt-in ruling on ancillary offerings online (the full impact of which was only felt in Q1, 2017), resulted in reduced profit after tax. 

Tune Protect's revenue however rose 6.6% to RM133.87mil from RM125.53mil. Earnings per share were 1.73 sen compared with 3.52 sen. It declared an interim dividend of 5.2 sen compared with five sen a year ago.

In the first half, is earning declined 49% to RM24.94mil from RM49.09mil in the previous corresponding period. Its revenue increased by 3.5% to RM263.96mil from RM255.08mil.

Commenting on the Q2 FY17 results, group CEO of Tune Protect, Razman Hafidz Abu Zarim said despite the decline, he was encouraged by the growth of its topline. 

“Gross written premiums is up by 11.3% which was driven by our motor, offshore oil, and engineering, as well as Middle East travel businesses,” he said.

Tune Protect had also secured a new airline partner – Cambodia Angkor Air – the 4th airline partnership and it was expected to start in the third quarter.

“This is definitely a silver lining for Tune Protect, as we ride out the storm. Securing another airline partner in the region is a huge milestone for us as it brings us closer to our vision of becoming a leading travel insurer in Asean,” he said. 

Razman said to alleviate the higher costs of motor claims that continue to impact the  Malaysian general insurance business, Tune Protect redirected car repairs to non-franchise panel workshops to minimise the cost. 

“We are also revising the way we evaluate franchise vehicles that have higher loss exposure, and reviewing beyond economic repair level to curb total loss exposusre,” he added.

On its digital global travel business, the effects of the opt-in ruling was seen to be moderating. 

Tune Protect launched its bundling programme with AirAsia’s premium fares to drive recovery in the business. 

Razman said the group would continue to work closely with AirAsia and apply dynamic pricing, to deliver more personalised products, including annual plans and migrant plans for its customers.

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