Allianz Malaysia Berhad : Encouraging Fundamentals-27/08/2010

General business does well from top to bottom. General insurance gross premiums grew by 14.1% yoy in 1H FY12/10, driven by its productive agency force (49%) and bancassurance tie-up with CIMB (12%). We understand that in the 1H, its motor policy segment growth was driven by its franchise distribution channel (16%) where new car owners buy their policies straight from the car dealers i.e. the franchise distributor of Allianz products. Underwriting margin improved by 3.5%-pts to 89.6% as a result of lower claims ratio of 62.7% vs. 1H09’s 63.4%, lower commission ratio of 8.9% vs. 9.0% in 1H09, and lower management expense ratios of 18% vs. 20.7% in 1H09.