Syarikat Takaful Malaysia Bhd (STMB), which saw its first quarter earnings come in almost flat, expects modest growth in view of the challenging and competitive business environment in 2016, particularly due to the volatile and uncertain global economy, said President and Managing Director Datuk Hassan Kamil as quoted in SunBiz recently.
“We remain cautiously optimistic on maintaining the earnings outlook for the year due to stable business expansion via our multi-channel distribution strategy despite lower expected investment returns,” he said.
STMB’s first-quarter net profit to 31 March 2016 was a marginal 0.29% increase at MYR46.62 million (US$11.6 mln) on the back of a 13% jump in revenue to MYR633.25 million.
The almost flattish earnings was mainly attributable to lower tax expense, which was partially offset by lower net investment income, while the higher revenue was contributed by increased sales generated by both the family takaful and the general takaful businesses.
For financial year 2015 (FY15), the Islamic insurer registered an 11% increase in net profit of MYR155.9 million compared with MYR140.5 million in 2014. Its group operating revenue stood at MYR1.8 billion in 2015, up from MYR1.7 billion in 2014.
Mr Hassan said that growing the operators’ family takaful and general takaful businesses along with strong expense management discipline will be the major contributors to the expanding contribution for 2016.
“We are anticipating the contributions to rise along with the increasing acceptance of our products due to our continuous focus on promoting and delivering comprehensive products and services to our valued customers,” he said.
For 2016, Mr Hassan is anticipating a 15% new business contribution growth, with stronger growth from employee benefits, credit-related, and motor takaful businesses.
For FY15, STMB’s total new business contribution was MYR1.26 billion.
For the fourth quarter of 2015, STMB sustained its position as the market leader in the family takaful business, capturing a 23% share. This translates into MYR823 million in gross contributions.
In addition, the company also maintained its first ranking in the group family takaful business, securing 26% of the market share that translates into MYR445 million in gross contributions.
The industry report until 4Q 2015 witnessed STMB sustaining its position as the second largest general takaful operator in the country, capturing 19% of the general takaful business.
MYR1 = US$0.25