Kurnia Group
Kurnia Asia continues to deliver strong quarterly profit
October 29th, 2009
Petaling Jaya, 29 October 2009 – Kurnia Asia Berhad (KAB) released its unaudited
quarterly financial results for the period ended 30 September 2009 at its corporate
head office in Menara Kurnia.
KAB successfully recorded a turnaround in net profit of RM32.22 million, reversing
a net loss of RM12.11 million incurred in the corresponding quarter last year. KAB
attributed the significant improvement to the strong turnaround performance of the
Group's investment portfolio on top of an improvement in the Group's underwriting
performance year-on-year.
KAB's Executive Chairman, Tan Sri Dato' Paduka Kua Sian Kooi, commented: "Despite
operating in an increasingly competitive operating environment, we are delighted
to deliver a good set of results. We are very pleased with the Group's continuous
positive underwriting performance for 5 consecutive quarters. Our internal on-going
transformation and revitalization program called Transformation of Operations and
Performance (TOP) and the next wave of transformation called Mission 15 have definitely
helped the Group's underwriting results to improve year-on-year."
Underwriting surplus for the quarter ended 30 September 2009 was RM3.68 million,
an improvement of 38% from last year's underwriting surplus of RM2.67 million, in
spite of a gross premium year-on-year decline of 18.1% from RM282.55 million to
RM231.32 million due to the implementation of more stringent risk selection guidelines.
The on-going transformation initiatives are clearly bearing evidence to the Group's
improving performance.
The Group's profitability was also enhanced by the substantial turnaround in net
investment return of RM34.02 million for the period under review, compared to the
net investment loss of RM7.99 million incurred last year. The positive turnaround
for net investment return was due to KAB adopting a more conservative and defensive
investment strategy as well as some write-back of mark-to-market losses provided
previously.
Besides the underwriting surplus and positive net investment result, the Group recorded
a reduction in its management expenses of RM10.87 million from last 30 September
2008 and RM22.28 million from last quarter. The decline in management expenses was
due to prudent cost management initiatives implemented via Mission 15.
Tan Sri Kua commented, "As we mentioned in our previous quarter, we will continue
on our journey of transformation to further improve our operational efficiency and
service standards to better serve our customers and agents nationwide. Hence, we
have embarked on Mission 15 initiatives and will also continue with our TOP's 5
strategic pillars (namely business risk selection, better claims management, diversification
into non-motor business, prudent cost management and performance-based management
system), placing greater emphasis on building a more efficient and resilient organization
to achieve sustained productivity and profitability.
"We will continue to be vigilant in our commitment to provide excellent service
and have set clear targets to achieve our goals. We expect the Group to be on a
profitable course, recording a sustainable financial performance for the final quarter
of the current financial period ending 31 December 2009. We also welcome the recent
announcement by our Prime Minister Dato' Sri Najib Tun Razak in his Budget 2010
speech on the revision of motor insurance scheme. The proposed changes are positive
and shall enhance the Group's confidence going forward," Tan Sri Kua concluded.