Kurnia Group
Kurnia Asia Maintained Positive Underwriting Performance
February 27th, 2009
Petaling Jaya, 27 February 2009 – Kurnia Asia Berhad (KAB) released
its unaudited financial results for the second quarter (Q2) of the financial
year ending 30 June 2009 (FY2008/09) at its corporate head office in Menara
Kurnia.
KAB successfully achieved positive underwriting performance for two consecutive
quarters for its current financial year under review. The Group improved its
underwriting performance to a surplus of RM5.73 million for Q2 FY2008/09, on
the back of an underwriting surplus of RM2.67 million in the first quarter
of the current financial year. Hence, for the 6-month period ended 31 December
2008, KAB achieved a total underwriting surplus of RM8.40 million, a turnaround
from an underwriting deficit of RM30.02 million recorded in the corresponding
period of the previous financial year.
KAB’s Executive Chairman, Tan Sri Dato’ Kua Sian Kooi, commented: “Amidst
such an uncertain economic outlook and challenging financial markets, we have
maintained our momentum in the second quarter towards achieving positive results
for the current financial year ending 30 June 2009.”
“We are very focused on staying our course to build a sustainable and
profitable business. The five critical pillars of our transformation program
(Transformation of Operations and Performance – TOP): organizational
leadership, distribution, underwriting, claims and growth in non-motor sectors;
have proven to be an effective strategic direction.”
Tan Sri Kua further said: “As we mentioned in our previous quarterly
announcement, we are strategically refocusing our priorities on the non-motor
sector to achieve a 15% non-motor portfolio mix, up from 12% last year. On
a cumulative basis for the current financial year under review, the non-motor
segment’s contribution to our gross premium has increased to approximately
17%. We are pleased to see the progress made so far, and we hope to keep up
this encouraging performance.”
The improvement in performance of its underwriting results is attributed to
a more pro-active risk selection strategy and strengthened claims management
practices implemented through the internal transformation and revitalization
TOP program. The Group’s claims expenses reduced by 11.1% to RM345.2
million from RM383.6 million for the same 6-month period in the previous financial
year. As such, the Group’s claims ratio has improved to 68.1% from 75.9%
correspondingly.
The Group’s gross premium for the 6-month period ended 31 December 2008
dipped slightly to RM548.8 million from RM550.6 million for the corresponding
period in the previous financial year as the Group adopted a more stringent
risk selection process to attract quality business. Quarter-on-quarter, the
Group’s gross premium declined by 5.8% to RM266.3 million in Q2 FY2008/09
from RM282.0 million in Q1 FY2008/09.
Notwithstanding the lower gross premium performance for the quarter under review,
the Group recorded a net profit of RM0.11 million, an improvement from a
net loss of RM12.11 million in Q1 FY2008/09. Hence, the Group incurred a
net loss of RM11.20 million for the 6-month period ended 31 December 2008,
where the bulk of the losses were incurred in Q1 FY2008/09. The net loss
is partly due to investment losses made in Q1 FY2008/09 due to the poor showing
in the equity market and finance-related expenses.
“As most businesses around the world continue to suffer from the financial
crisis, our investment performance has been impacted as well, which has affected
our overall profitability for the current financial year. We have taken steps
to review our asset allocation in our investment portfolio and have adopted
a defensive stance in view of the uncertain economic outlook. This has proven
to be a prudent measure as the Group’s quarter-on-quarter investment
and other income performance rebounded from a net loss of RM7.99 million from
the previous quarter to a net gain of RM2.67 million,” commented Tan
Sri Kua.
Tan Sri Kua further added, “Despite such a challenging environment,
we are encouraged by our improved overall results and we are determined to
achieve healthier performance for the remaining half of the current financial
year.”
The Group’s year-to-date results are mainly derived from Kurnia Insurans
(Malaysia) Berhad (KIMB). P.T. Kurnia Insurance Indonesia (KII) recorded a
gross premium of RM16.45 million and a net profit of RM0.75 million for the
quarter under review. No contribution was taken in from the Group’s equity
holding of 25% in Kurnia Insurance Thailand Co. Limited (KIT) during the current
period as the acquisition of KIT was only completed on 26 December 2008.