Group managing director Datuk Mohamed Hassan Kamil told StarBiz the company had set a good record of cash back payouts in the last five years and had disbursed RM137mil to customers and business partners.
“Given the positive growth of our general takaful business this year, we are definitely anticipating to disburse higher cash back payouts. Furthermore, we are continuing to offer the additional 5% cash back for certificates expiring in 2014 across all our non-motor products,’’ he added.
For 2013, STMB handed RM30mil in cash back payouts. Hassan said its competitive edge over other takaful and conventional players was its ability to offer customers a 15% cash back should they make no claims during the coverage period.
In a bid to establish a strong foothold in the local insurance and takaful sector, he said the company would continue to promote cash back payouts.
On the whole, he said STMB would strive to do better this year as the company’s performance was anticipated to be positive and remained encouraging across the entire business segments, especially the group family takaful.
The fact that insurance penetration in both the conventional and takaful sectors was still low meant there was plenty of room for organic growth to chalk up another year of healthy growth, he noted.
Its net profit in the fourth quarter ended Dec 31, 2013 rose 27.9% to RM41.5mil, mainly due to higher sales generated by both its family and general takaful businesses. Revenue improved to RM378.5mil from RM316.1mil a year earlier.
STMB proposed a dividend of 30 sen for the quarter under review compared with 10 sen paid out previously.
For the full financial year 2013 (FY13), its net profit surged by 37% to RM139mil from RM101.2mil previously, while revenue increased to RM1.7bil from RM1.6bil.
RHB Research Institute said STMB’s earnings for FY13 beat the research house’s and street estimates by 110% and 115% respectively, due to higher wakalah (agency) fee income recognition, and improved claims and expense ratios.
It is maintaining a “buy” call on the company, saying the worst is over for the retail portfolio as STMB is adding on its numerous bancatakaful partnerships to diversify its risks.
It expects the general takaful segment to fare better in FY14, given the improved economic outlook and the insurer’s unique cash back proposition.
RHB Research said cash back gave the company a competitive edge as it boded well for consumers amid the spiralling cost of living.
Asked if stringent lending guidelines introduced by Bank Negara in July last year to curb rising household debt would impact its bancatakaful business, Hassan said the impact would only be for a short term as banks would be able to come up with strategic business initiatives to move forward.
Moreover, the rise of Islamic loan products or syariah-compliant loans in the market provides a vast opportunity for the company to expand its bancatakaful business.
In July last year, the central bank launched macro-prudential measures involving the shortening of mortgage and personal loan tenures to rein in escalating household debt.
Currently, the bancatakaful channel contributes less than 40% of STMB’s total new gross contribution of both the family and general businesses combined.
Group family takaful business, on the other hand, contributes about 70% of total group gross contribution and the percentage is expected to be slightly lower this year as it grows its general business.
STMB, which has about two million customers, has about 745 retail and 2,101 corporate agents. It plans to recruit 1,200 retail agents this year.
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