Kurnia Group
Kurnia Asia Earnings Surged Driven By On-Going Transformation
August 27th, 2009
Petaling Jaya, 27 August 2009 – Kurnia Asia Berhad (KAB) released its
unaudited financial results for the fourth quarter (Q4) and the year ended
30 June 2009 (FY2008/09) at its corporate head office in Menara Kurnia.
KAB successfully transformed its operations for the full financial year ended
30 June 2009 with a net profit of RM57.05 million, reversing a net loss of
RM301.79 million incurred last year. KAB attributes the substantial improvement
largely due to the positive and sustained underwriting performance for four
consecutive quarters achieved during FY2008/09. On a quarter to quarter basis,
the Q4 net profit also improved by 61.7% to RM42.66 million from RM26.39 million
recorded in the previous third quarter (Q3) ended 31 March 2009.
KAB’s Executive Chairman, Tan Sri Dato’ Paduka Kua Sian Kooi,
commented: “We are delighted with the significant turnaround in the Group’s
earnings. It is truly an exceptional achievement amidst such a tough operating
environment. We have successfully transformed our operations via the Transformation
of Operations and Performance (TOP), which is our internal on-going transformation
and revitalization program. TOP has definitely helped to bring the Group’s
underwriting results back on track.”
Underwriting surplus for FY2008/09 totaled RM20.82 million, in sharp contrast
to a deficit of RM401.723 million last year, despite a year-on-year drop of
6.1% in gross premium from RM1.12 billion to RM1.05 billion. The strategic
measures implemented during the financial year, including business risk selection,
better claims management, diversification into non-motor business, prudent
cost management and performance-based management system have started to bear
the desired results.
Having improved the claims management practice as well as the strengthening
of claims provision in the prior year, claims ratio decreased significantly
from 106.7% in FY2007/08 to a normalized level of 65.9% for the financial year
under review. Similarly, prudent cost management initiatives implemented has
started to reduce management expenses year-on-year from RM235.26 million to
RM213.50 million, representing a savings of RM21.8 million.
In addition to the Group’s positive underwriting performance, a net
investment return of RM47.78 million has enhanced the Group’s earnings
for FY2008/09. The defensive investment strategies adopted have helped the
Group to overcome the poor showing of the equity market experienced during
the financial year under review. Besides the underwriting surplus and positive
net investment result, the Group also recognized a tax benefit amounting to
RM17.98 million for FY2008/09.
In line with its non-motor expansion strategy, the Group has increased the
non-motor insurance’s gross premium contribution to 18% of its overall
portfolio for the financial year under review, up from 14% last year. The Group
aims to increase its non-motor insurance contribution to a third of its gross
premium in the next 3 years as part of the Group’s strategy to achieve
a more balanced portfolio.
Tan Sri Kua commented, “Though our main subsidiary, Kurnia Insurans
(Malaysia) Berhad, is back on a profitable track, our transformation journey
does not end here as we are determined to achieve better results moving forward.
We have initiated our next wave of transformation via Mission 15 – a
transformation program focused on further improving our operational efficiency
and service standards to better serve our customers and agents nationwide.”
“Not only do we aim to maintain our transformation momentum, we will
strive to go further and beyond what we have achieved thus far,” Tan
Sri Kua concluded.