Thursday, June 16, 2011

Kurnia to expand non-motor business


PETALING JAYA: Kurnia Asia Bhd aims to increase the non-motor business of its main subsidiary, Kurnia Insurans (Malaysia) Bhd (KIMB), to 25 per cent of its overall gross premium portfolio this year.
For the financial year ended December 31 2010, KIMB increased the proportion of its non-motor business to overall portfolio by 18 per cent.

"We are on track to meet the 25 per cent target," KIMB chief executive officer Wong Kim Teck said after the company's annual general meeting yesterday.

Wong said for the first quarter of 2011, the general insurer expanded its non-motor segment by some 22 per cent.

Kurnia Asia is aiming for a 30 per cent contribution from the non-motor to the gross premium portfolio by 2012.

KIMB expects the non-motor business to be its key growth area since it started the transformation of operations and performance (TOP) and Mission 15 programmes some three years ago.

The initiatives are to reduce reliance on its motor insurance segment and improve profitability.

Over the last one year, Kurnia Asia has been increasing its capability and competency in underwriting non-motor business.

Wong wants to engage more with insurance brokers who collectively underwrite about RM13 billion of non-motor business in the country.

KIMB has continued to reduce its exposure to unprofitable third-party motor policies by 44 per cent year-on-year, or only 5 per cent of its total motor gross premium.

In its bid to re-balance and improve the quality of its motor portfolio, the insurer increased comprehensive motor policies by 18 per cent last year.

OSK Research, in a recent report, upgraded its 2011 and 2012 earnings outlook for Kurnia Asia since it expects the group to benefit from the increase in motor premium, which will take place from 2012 to 2015.

For 2011, it said, the gross premium will likely record a high single-digit to low double-digit growth, coming mainly from the non-motor segment in accordance with Kurnia's strategy to grow its more lucrative non-motor business.

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