KUALA LUMPUR (Nov 25): Tune Protect Group Bhd saw its net loss widen to RM12.18 million in the third quarter ended Sept 30, 2022 (3QFY2022), from a net loss of RM1.66 million a year ago, despite higher revenue recorded in the current quarter under review.

The 3QFY2022 net loss marked the group's fifth consecutive loss-making quarter with a net loss per share swelling to 1.62 sen in 3QFY2022 from 0.22 sen in the previous year, the insurer's bourse filing showed.

Quarterly revenue rose 24.99% to RM129.72 million from RM103.78 million a year ago.

In a statement, the insurer said the net loss for 3QFY2022 was dragged by the normalisation of motor claims post Covid-19 lockdown and investment losses. In addition, it said the high top line growth requires time to be realised as earned premiums.

Notably, its gross earned premium improved 31% year-on-year (y-o-y) to RM125.66 million from RM95.88 million.

Nonetheless, Tune Protect's net loss improved from RM19.8 million posted in the immediate preceding quarter. The group expects its bottom line to continue to improve over the next few quarters.

For the cumulative nine months ended Sept 30, 2022 (9MFY2022), net loss further ballooned to RM34.95 million from RM2.86 million a year before, despite revenue increasing 17.66% to RM390.55 million from RM331.92 million previously.

Commenting on the group’s latest financial performance, Tune Protect group’s chief executive officer Rohit Nambiar said that the results show the organisation’s growth plans are on the right track.

“The group managed to register robust 3Q22 topline growth which continued to outpace expenses. In addition, the company achieved a commendable retention ratio of close to 70% in all of our preferred lob [all lines of business].

“There were higher commissions attributable to the increased topline, as well as rising operating expenditure (Opex) due to staff cost in developing talent and marketing cost in line with business recovery. Although investment losses narrowed during the quarter over the year, investments were still adversely affected by weak market conditions for bond funds, as well as equity,” Rohit added.

“As an Insurtech, this is a vital KPI [key performance indicator] for us as it shows we are both expanding aggressively, but also investing in our tech and people's capabilities,” Rohit added.

Meanwhile, Rohit said Tune Protect is also progressing with its expansion plan in Vietnam by announcing two new major partnerships in the country, including a giant digital payment gateway which is scheduled for launch by the end of 2022.

The group is partnering with one of the largest financial technology companies in Vietnam with 15 million active individual users and more than 150,000 corporate clients, Rohit added.

On investment strategy, Rohit said the group has decided to cut exposure in the equity market, while expecting its bonds to end the year with positive returns.

“Markets will continue to be volatile. The growing fears of recession led to a bond rally in July 2022, but it will take another quarter to confirm the direction of the US led global economy,” Rohit said.

Rohit noted that the group’s investment income in the current quarter was weighed down by continued uncertainties in the Asia Pacific equity market, particularly in China. China's zero Covid policy as well as the sustained record-high inflation in the US continue to be a drag on market returns.

On the bright side, Rohit said the group’s conservative positioning in the domestic bond market has shielded them from much of the volatility arising from the relentless upward drive in the US Fed fund rates.

Tune Protect's share price closed unchanged at 26 sen on Friday (Nov 25), giving it a market capitalisation of RM195 million.