KUALA LUMPUR: Tune Protect Group Berhad (“Tune Protect” or “the Group”; TUNEPRO, 5230) has recorded its highest-ever quarterly profits and improved full-year performance in 4Q24 and FY24. The Group’s strong recovery trend was driven by notable growth in net insurance service results and Profit After Tax (“PAT”) year-on-year (“YoY”).
Chief Executive Officer of Tune Protect, How Kim Lian, attributed this solid financial performance to key strategic decisions, including portfolio optimization and enhanced cost efficiency.
Travel Segment Leads Growth in Net Insurance Service Results
The Group’s financial results in 4Q24 and FY24 were commendable, with a PAT of RM9.5 million for 4Q24 and RM2.7 million for FY24, signaling a strong rebound. The surge in profits was largely led by a substantial 82.8% quarter-on-quarter (“QoQ”) increase in net insurance service results, reaching RM11.1 million in 4Q24. On a YoY basis, the FY24 net insurance service result more than doubled to RM3.0 million.
This positive trend was primarily driven by a strong performance in the Travel segment, improved acquisition cost due to a refined portfolio mix, and a lower reinsurance ratio. Although insurance revenue saw a 1.2% decline QoQ to RM99.0 million in 4Q24, the YoY growth remained robust at 14.2% when excluding the RM43.6 million Tenang impairment recorded in 4Q23.
“PAT increased by over 100%, supported by topline growth, lower reinsurance premiums, reduced attributable expenses, and lower tax provisions,” said How.
Enhanced Cost Efficiency Drives Improved Combined Ratio
Another highlight of 4Q24 was the improvement in the Group’s combined ratio, both YoY and QoQ. Even without the impact of the Tenang scheme impairment, the Group achieved a significant 6.8 percentage point YoY improvement, with the 4Q23 combined ratio standing at 95.5% after adjustment.
For FY24, insurance revenue increased by 4.0% YoY to RM389.2 million, while net insurance service results reversed from a RM9.0 million loss in FY23 to a RM3.0 million gain in FY24. The Group’s PAT of RM2.7 million was supported by over 100% growth in net insurance service results, despite lower investment income and a negative RM6.6 million share of results from Tune Protect Thailand (“TPT”), which faced impairment due to claims recovery issues.
The combined ratio improved by 3.2% YoY, reflecting better cost efficiency and a lower reinsurance ratio. This was achieved through a strategic exit from the large Commercial segment, higher insurance revenue from the Travel segment, and lower management expenses, which helped offset higher Motor and Fire claims in 2024.
However, net incurred claims and attributable expenses rose 6.7% YoY, largely due to four major Fire losses and increased Motor claims during the year.
One-Off Losses Impacting PBT Expected to Normalize
The Group highlighted that key events affecting Profit Before Tax (“PBT”) in FY24 were mostly one-off occurrences. Excluding these events, PBT would have stood at RM16.1 million.
“These one-off events included exposure to four large Fire losses, which were higher than in previous years but are expected to normalize going forward,” said How.
Additionally, impairment losses in 2Q24 from Tune Protect Ventures (the Group’s digital life insurance entity) contributed to lower PBT. Digital life insurance traction was slower than anticipated, while the health insurance business is now offered via Tune Protect Malaysia (“TPM”), reducing the need for a separate entity.
Investment Performance Stabilized Amid Market Volatility
Despite market fluctuations caused by a hawkish U.S. Federal Reserve policy and political uncertainties in the U.S., the Group’s investment performance remained stable, posting RM30.0 million in total investment income for FY24.
“We continue to maintain a conservative investment approach. In 4Q24, we completed the rebalancing of our portfolio, shifting towards low-risk unit trust funds, which are primarily invested in Malaysian Government Securities, Government Investment Issues, and Government-Guaranteed Corporate Bonds,” How explained.
Travel Segment Drives Future Growth
Moving into 2025, Tune Protect’s Travel segment remains the key growth driver, focusing on three main pillars:
- Expanding market presence
- Establishing a travel centre of excellence
- Enhancing travel experiences beyond insurance
The Group made significant progress in 4Q24, expanding inbound travel coverage to 10 new markets, including Australia, India, Japan, Brunei, and Taiwan. Additionally, Tune Protect aggressively recruited top travel agents in Malaysia, partnered with four online brokers in Thailand, and onboarded four new Online Travel Agencies (“OTAs”) in Thailand and Indonesia to strengthen Travel Insurance distribution.
Another major initiative was the Delay Lounge Pass, which provides customers access to airport lounges during flight delays. This service is now available in most Asian markets through the Group’s airline partner, with plans to expand beyond Asia.
Optimizing Motor Portfolio and Claims Management
Beyond the Travel segment, the Group remains focused on optimizing its Motor insurance portfolio by refining pricing strategies, improving portfolio mix, and tightening claims management.
“Our goal is to align our Motor claims ratio with industry standards, and we expect favorable impacts on Motor claims performance in 2025. We are also gradually adjusting our portfolio mix to focus on segments with a better loss ratio,” How added.
Future Outlook: Strengthening Global Travel Ecosystem
Tune Protect aims to further expand its presence in the global travel ecosystem, enhancing its inbound travel offerings through better product features, pricing strategies, and benefits. The Group is also strengthening airline partnerships by improving airline platform integrations and launching new insurance products with enhanced benefits to increase adoption among airline customers.
To deepen its reach, the Group is targeting regional players, including travel agencies, hotel chains, cruises, event organizers, and ticketing platforms. It also plans to roll out Delay Lounge Pass services in new markets and introduce bite-sized Flight Delay Insurance for airline corporate programs.
Additionally, Tune Protect is exploring new travel-related value-added services, such as eSIM offerings, to enhance customer experience.
“Our strategic focus will remain on expanding travel insurance and other high-margin business segments, while maintaining strict cost and claims management. By leveraging our expertise and innovative approach, we aim to capitalize on emerging opportunities and drive sustainable growth,” How concluded.
