KUALA LUMPUR: MNRB Holdings Bhd sees a modest growth of 8.5% in revenue in its fiscal year ending March 31, 2010 (FY10) due to selective underwriting, overseas expansion and a higher claims ratio.
The reinsurance company posted a 20% growth in revenue to RM1.2bil but net profit plunged 86.7% to RM22.7mil in FY09 against FY08.
Chairman Sharkawi Alis said profitability in the industry might not be in tandem with the revenue achieved.
Sharkawi Alis … ‘Our takaful operation will also consolidate this year.’
“We may do well in increasing the premiums growth but higher claims could pull down profit likewise in FY09. The large difference in net profit in FY09 was also contributed by the RM75mil proceeds from MNRB’s disposal of a 3.24% direct equity interest in Malaysian Oxygen Bhd in FY08,” Sharkawi said after the company’s AGM on Friday last week.
He added that under the current economic climate and what the company had experienced last year, nobody could conclude that the worst was over, hence the modest projection. Sharkawi said Malaysian Reinsurance (MNRB’s wholly-owned subsidiary) would be selective in the industry that it underwrites and not just underwrite for the sake of premiums growth.
“Overseas market expansion, which had been rapid for the past couple of years, will be done cautiously this year to make sure we will invest only in profitable business. Our takaful operation under Takaful Ikhlas, which had enjoyed growth 30% to 40% over the last couple of years, will also consolidate this year. We only target gross contribution income of RM600mil compared with RM580.5mil last year,” he said.
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