Tune Ins Holdings Berhad - Investor Relationsir.chartnexus.com/tuneinsurance/docs/presentation/q2_2014.pdfAnalyst Presentation August 2014. 2 Agenda Key Highlights 1 Online Insurance

Tune Ins Holdings Berhad- Financial Results June 2014

Analyst Presentation

August 2014

2

Agenda

Key Highlights

1

Online Insurance Business

Tune Insurance Malaysia Berhad

(TIMB)

2

2Q & 1H 2014 Results

3 4

3

Agenda

Key Highlights

1

Q2FY14 KEY FINANCIAL HIGHLIGHTS

4

OVERVIEW

RM 14.6m profits in 2Q14 on the back of revenue of RM 101 million contributed primarily from its online business which recorded an increase in profits of 12% and revenue of 14% yoy.

Significant investments internationally including new companies in Thailand and Middle East as well as domestic investments in online platform and marketing

ONLINE

12% PAT growth yoy with the May launch of a new partnership via a joint venture with Cozmo Travel LLC (“Cozmo”) in MENA region which achieved over 24,000 policy sales during its first two months of operation

Currently present in more than 30 countries across 4 continents, whether directly or through local partnerships Riding on expansion mode of its main airline partners Expected upswing of travellers and flights going in and out of the new and vibrant KLIA2

MALAYSIA : TUNE INSURANCE MALAYSIA BERHAD (TIMB)

PBT before MMIP of RM5.5 mil, flat growth yoy; Revenue up yoy at RM183.8 mil for 1H14 PAT shows a decline of 69% due to an MMIP cash call in the same period in 2013 leading to 2Q13 PAT more than PBT An MMIP cash call is expected in 2H14 which will provide a tax allowance for TIMB for 2H14 Strong growth in 1H14 will naturally lead to an increase in UPR reserve which will gradually be released over the coming months for

2H14

THAILAND : TUNE INSURANCE PUBLIC CO. LTD (TIPCL)

Acquisition of OSI (renamed to TIPCL) in May 14 with the company contributing to the bottom line of RM0.34mil as at June 14 Commenced extremely positively and will be a significant contributor to group profits and value in 2015/2016 Recent focus has been on investments in people, products, processes and technology to cope with the expected exponential growth in

business

Q2FY14 KEY DEVELOPMENT & UPDATES

Profitability

Launch of Investor Relations App in June & LINE Account in July

Launched Korea & Japan for TAAX

Launching inbound – Korea in August

Leverage on AirAsia’sGrowth and Assets

Replicate & Expand Travel Insurance Business Model

Establish Digital Innovation and Drive Business to Consumer Platform

Capture Synergies from TIMB Integration & Diversify Product Offering

Enhance Revenue Streams via Strategic Acquisitions

Launched 8 new markets with 14 countries in the Mena region

Cebu launched new markets - Cambodia, Indonesia & Brunei

Testing & improvement - EDM blasts selectively to database with different tag line messages

Insurance for Foreign Worker – tied-up with United Nation Refugee

Set up Sibu branch in April

Acquired 49% interest in OSI and Permpoonsub Broker Co Ltd and OSI renamed to Tune Insurance Public Company Limited (“TIPCL”)

5

REGIONAL FOOTPRINT COVERING >30 COUNTRIES ACROSS 4 CONTINENTS

India

China

Japan

Australia

Oman

Macau

Indonesia

Myanmar

Brunei

Cambodia

Singapore

Malaysia

Thailand

VietnamLaos

Philippines

Hong Kong

Taiwan

Egypt

Morocco

Qatar

BahrainItalySpain

Belgium

France

GermanyEngland

Netherlands

U.A.E

Asia

Africa

Europe

Australia

Korea

6

Operate low risk and ‘capital-light’ business model

Drive Innovation via Implementation of a

Digital Platform

Leverage on Shareholders’

Network

Grow Profitably Existing Osotspa

Businesses

• To launch travel insurance for MAA & IAA

STRATEGIC ACQUISITION IN THAILAND- INTEGRATION ON TRACK

7

Acquisition

Sept4Q

2014April JuneMayMar

Integration

• To launch travel insurance for TAA & TAAX

• New brand launch

• New insurance system (phase 1)

Submission of application in respect of a proposed acquisition of shares in OSI

July Aug

• New Directors on board

• new organization chart

• Renamed to TIPCL

• New corporate website

• Business planning on going

OIC approved on the 49% of acquisition of shares in OSI

Completion of the acquisition of OSI and PPS

Launch new businesses:

Group business

Affinity business

New infrastructure

New insurance system

(phase 2)

Strategic Priorities

Offer and Grow Travel Insurance

Transaction Highlights

Acquisition of 49% stake in OSI (currently renamed to TIPCL) and PPS with cash purchase consideration of THB 408,653,974(equivalent to approximately RM 41.24 million or USD 12.64 mil)

Valuation : Price of net asset of 1.7x based on OSI net asset as at 31 Dec 13 & considering a 5 year commitment to continue utilizingTIPCL to provide Osotspa with insurance products as well as a write-back from Best Re provisions

Source of funding : Proceeds earmarked for strategic investments from the IPO and internally generated funds

LOOKING AHEAD PLAN IN 2HFY14

Profitability

Improve data intelligence by focusing on non-purchasers analysis and propensity modelling

To launch Inbound products – Sri Lanka, Nepal, Jeddah & India

To launch warrant insurance for Air Asia

To revert to prior sales process following Q2 test

Leverage on AirAsia’sGrowth and Assets

Replicate & Expand Travel Insurance Business Model

Establish Digital Innovation and Drive Business to Consumer Platform

Capture Synergies from TIMB Integration & Diversify Product Offering

Enhance Revenue Streams via Strategic Acquisitions

To launch new markets for Cebu – Japan, Dubai & Vietnam

Leverage on knowledge and experience gained from new market entrance / partnerships for future tie-ups

To launch new markets – Kuwait & KSA

Progressively focus on B2C and B2B2C leveraging digital database and affinities to reduce marketing cost

To adopt a unified branding across all entities & place increased emphasis on Tune Direct & shared services

Maintain motor portfolio to be less than 35%

Maintain a sustainable ICTL of at least 200%

Recruitment of quality agents continues

TIPCL - Underwrite online insurance, agency and broker businesses, as well as offer products through new channels and partnerships, and continue to leverage on the diversified businesses of Osotspa Group

8

9

SNAPSHOT OF FINANCIAL RESULTS

Q2 2014 Q1 2014 Q2 20132Q vs 1Q Variance

Q2 vs Q2 Variance

YTD Jun 14 YTD Jun 13Y-o-Y

Variance

(RM’000) (RM’000) (RM’000) (%) (%) (RM’000) (RM’000) (%)

A B C A vs. B A vs. C D E D vs. E

Operating Revenue 101,510 113,952 96,707 -11% +5% 215,462 183,453 +17%

Gross Written Premiums

99,843 124,708 98,790 -20% +1% 224,551 198,224 +13%

Net Earned Premiums 60,518 64,187 61,551 -2% -2% 124,705 113,853 +10%

Investment Income 1 5,818 10,394 5,516 -44% +5% 16,212 13,396 +21%

Net fees & commission

(9,648) (10,064) (8,351) -4% +16% (19,712) (15,257) +29%

Net Claims (24,461) (26,318) (27,331) -7% -11% (50,779) (49,198) +3%

Management andother Expenses

(16,822) (16,055) (15,471) +5% +8% (32,877) (27,950) +18%

Finance costs - - - - - - (1,903) -100%

Share of results of JV (30) - - -100% -100% (30) - -100%

Share of results of associates

339 --

+100% +100% 339 - +100%

PBT (before MMIP) 18,114 25,144 16,364 -28% +11% 43,258 35,341 +22%

PBT 15,714 22,144 15,914 -29% -1% 37,858 32,941 +15%

PAT (before MMIP) 17,031 23,396 17,773 -27% -4% 40,427 34,946 +16%

PAT 14,631 20,396 17,323 -28% -16% 35,027 32,546 +8%

ROE (annualised) 15% 20% 19% -5% -4% 17% 18% -1%

ROA (annualised) 6% 8% 7% -2% -1% 7% 7% -

1 Investment income = investment income + realised gains & losses + other operating income + fair value gains

10

Agenda

2

2Q & 1H 2014 Results

Operating RevenueQoQ - Improved through growth in Online business and TIMB non-motor sales

RM’mil

YoY increased mainly contributed by:

- higher GEP in TIMB for Medical, Marine Hull, Travel and Fire class of businesses; and

- continuous growth in Online GEP in key markets of Malaysia, China, Thailand, and Philippines

QoQ (Q214 vs Q213) slight increase due to:

- minimal increase in TIMB GEP where the increase in travel business, offset by the drop in marine and offshoreclass of businesses; and

- Online: in line with the growth of 15% in number of policies earned Vs Q113

Year 2012 2013 YTD Jun 13 YTD June 14 Q2FY13 Q2FY14 Q1FY14

11

Online*TIMB*

29%71%

22%78%

18%82%

23%77%

23%77%

23%77%

24%76%

340 388

183 215

97 101 114

2012

2013 2014* % are based on gross figures before conso adjustment

12

Gross Written PremiumsQoQ – Consistent GWP underpinned by the growth of TIMB

YoY (1H14 Vs 1H13) increase driven by:

- substantial increase in GWP of TIMB mainly for Medical, Marine Hull, TPA & PA and Fire class of businesses

- higher GWP in Online in Malaysia, Philippines and China market

QoQ (Q214 vs Q213) minimal increase mainly contributed by growth in TIMB in PA & TPA

RM’mil


Online* 22% 23% 22% 21% 22% 22% 20%

TIMB* 78% 77% 78% 79% 78% 78% 80%

308 397

198 225

99 100 125

2012

2013 2014* % are based on gross figures before conso adjustment

13

Net Earned Premiums1

QoQ – Flat NEP mainly due to higher cession to reinsurers in TIMB

1 Net earned premium = gross earned premium received - premiums ceded to external reinsurers

YoY increase due to growth in Online business in key markets and growth in TIMB for non-motor class of businesses.

QoQ (Q214 vs Q213) flat NEP due to higher cession to reinsurers in TIMB

RM’mil


Online 31% 41% 39% 42% 37% 43% 42%

TIMB 69% 59% 61% 58% 64% 57% 58%

217 241

114 125 61 61 64

2012

2013 2014

14

Key Operating RatiosQoQ - Slight increase in combined ratio contributed by higher ME partially mitigated by goodclaims performance

1 Management Expense divided by Net Earned Premiums2 Sum of Net Claims, Management Expenses & Net Fees and Commissions divided by Net Earned Premiums

Combined ratio

YoY and QoQ increase due to higher ME ratio & commission ratio in TIMB as a results of the higher commission paid out tonon-motor segments which has higher regulated commission rate

ME ratio

YoY increase mainly due to (1) higher employee expenses for historic union settlement; (2) marketing costs and travelling &accommodation expenses for new market expansion. ME was consistent if excluding the aforesaid 2 factors.

QoQ increase due to decrease in NEP while minimal fluctuation in ME

ME1 (%)

Combine ratio2 (%)

Net claim (%)

Commission (%)

18.6%24.0% 23.8% 26.2% 25.1% 27.1% 25.4%

45.9% 39.0%43.2% 40.7% 44.4% 40.4% 41.0%

14.2% 14.9%13.4% 15.8% 13.6% 15.9% 15.7%

78.7% 77.9% 80.4% 82.7% 83.1% 83.4% 82.1%


15

Investment IncomeQoQ – Higher investment yield from wholesale funds

Consistent contribution from investment income YoY and QoQ, where major portion is contributed by tax exemptedwholesale funds

Higher investment QoQ mainly contributed by higher investment yield by placement in new wholesale funds

RM’mil


18 21

9 10 5 6 4

2012

2013 2014

16

Profit Before TaxQoQ –PBT (before MMIP) growth mainly driven by Online

YoY increase of RM5 mil (excluding MMIP impact: RM8 mil) driven by strong earnings from Online partially offset byhigher ME in TIMB

QoQ (Q214 vs Q213) (excluding MMIP impact) increase mainly driven by the growth of NEP from Online and also asmall contribution from the share of results of associates in Thailand.

Online 34% 60% 55% 69% 68% 80% 60%

TIMB 66% 40% 44% 31% 32% 20% 40%

RM’mil


PBT

PBT (before MMIP) 58

76

33 38

16 16 22

35

43

16 18

25

2012

2013

2014

Before MMIP

17

Profit After TaxQoQ – Flat PAT (before MMIP) underpinned by higher NEP from Online partially offset by higher ME and tax expense

YoY increase of RM3 mil driven by strong earnings from Online, partially offset by higher ME in TIMB and higher taxexpense (tax relief arising from payment of MMIP in YTD Jun 13). Excluding MMIP impact, it double up the YoY increaseto RM6 mil.

QoQ (Q214 vs Q213) slight decrease (excluding MMIP impact) due to higher NEP from online mitigated by higher ME and higher tax expense (tax relief arising from payment of MMIP in Q213) . An MMIP cash call is expected in 2H14 which will provide a tax allowance for TIMB for 2H14.

QoQ (Q214 vs Q114) decrease of RM5 mil (excluding MMIP impact: RM5.6 mil) due to realized gains resulting fromsale of TIMB building recorded in Q1FY14.

RM’mil


Online 41% 64% 56% 74% 63% 87% 65%

TIMB 59% 36% 44% 26% 37% 13% 35%

PAT

PAT (before MMIP)

2012

2013

2014

Before MMIP

48

72

32 35

17 15 20

-

3440

18 1723

18

Agenda

Online Insurance Business

3

19

Online Business - Key Highlights

Gross Sales before Reinsurance

• Gross sales before reinsurance increased 2% vs 2Q13 with main contribution from Malaysia and Philippines.

PAT

• RM13.7 million up 12% vs 2Q13 contributed by larger earned premium primarily from more people flying withinsurance

Continued Growth

31.5 32.0

63.067.9

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

+ 1.5%

+ 7.8%

Increased Profit

12.213.7

23.5

28.5

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

+ 12.3%

+21.3%Gross Sales before Reinsurance

(RM ‘mil) Profit After Tax (RM ‘mil)

20

Number of Policies EarnedRevenue is recognised when a customer commences their journey (date of departure per customer booking)

Malaysia48% (48%)

Thailand19% (19%)

Indonesia14% (15%)

Singapore4% (5%)

China8% (7%)

Others7% (6%)

2.03 million Policies Earned in Q2 2014

(vs. 1.76 million in Q2 2013)

4.18 million Policies Earned YTD Jun 14

(vs. 3.50 million YTD Jun 13)

2013

2014

Key (font colour):

Malaysia51% (49%)

Thailand17% (18%)

Indonesia13% (16%)

Singapore4% (5%)

China7% (6%)

Others8% (6%)

21

Number of Policies IssuedContinued growth in major markets particularly Malaysia, China, Thailand, andPhilippines

Malaysia54% (47%)

Thailand16% (17%)

Indonesia13% (17%)

Singapore4% (5%)

China6% (8%)

Others7% (6%)

Malaysia51% (47%)

Thailand18% (19%)

Indonesia13% (16%)

Singapore4% (5%)

China7% (7%)

Others7% (6%)

1.87 million Policies Issued in Q2 2014

(vs. 1.85 million in Q2 2013)

3.94 million Policies Issued YTD Jun 14

(vs. 3.65 million YTD Jun 13)

2013

2014

Key (font colour):2Q14 - Total Policies Issued increased by 1.1% yoy in spite of the recent implementation of ‘test / refine’ techniques to improve take up rate

22

Agenda

Tune Insurance Malaysia Berhad

(TIMB)

4

23

Gross Written Premium and Net Written PremiumMedical, travel and fire insurance continued to be the drivers

Gross Written Premium (“GWP”)

GWP increased YoY (1H14 vs 1H13) mainly driven by increase in Medical, PA & TPA and Fire class of businesses.

GWP increased QoQ (Q214 vs Q213) largely due to higher GWP from Travel class, but offset by decrease inMedical and Offshore class of businesses.

Net Written Premium (“NWP”)

NWP increased YoY and QoQ in line with the growth of GWP. NWP recorded an improved and sustainedretention ratio of 44% of GWP (1H14: 39%) as a result of management’s continued effort to maintain itsstrategic focus on higher retention profitable businesses i.e. PA, Franchise, Foreign Workers and Marine Cargo.

Gross Written Premium (RM ‘mil)

85.9 87.6

171.8197.0

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

+ 2.0%

+ 14.7%

Net Written Premium (RM ‘mil)

35.4 37.5

67.6

87.0

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

+ 5.9%

+28.7%

Rebalancing portfolio continued

Portfolio MixPortfolio well balanced as drive for quality agents selling the right mix of products continues

24

YTD Jun 2014

Continued efforts undertaken to rebalance TIMB’s business portfolio to more profitable segments of non-motor business.

Fire, 17% Motor, 25%

Marine, 15%

PA & Medical,

30%

Misc, 13%

No of agents

Fire, 18%

Motor, 29%

Marine, 17%

PA & Medical,

22%

Misc, 14%

YTD Jun 2013

48%32% 25%

52%68% 75%

FY12 FY13 YTD 14

Motor

Non-Motor

No of Agents

Total as atDec 2013

YTD Jun 2014 Total as atJune 2014Recruited Terminated Suspended

(A) (B) (C) (D) (E=A+B-C-D)

1,137 108 90 25 1,130

No of Agents

Total as atMar 2014

Qtr 2 2014 Total as atJune 2014Recruited Terminated Suspended

(A) (B) (C) (D) (E=A+B-C-D)

1,141 58 45 24 1,130

25

Profit After TaxStable underwriting profit margin (before MMIP) of 6%

YoY decrease in underwriting profit (before MMIP) due to higher combined ratio, in particularly netcommission and management expenses;

Despite no major fluctuation in QoQ underwriting profit (before MMIP), QoQ profit after tax decrease RM4.4mil due to higher provision for MMIP and higher income tax expenses (tax relief arising from the payment ofMMIP in Q2 2013);

Underwriting margin* (before MMIP and allowance for doubtful debts) of 6% for YTD Jun 14.

Profit After Tax (RM ‘mil)

6.4

2.0

14.3

9.1

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

- 68.8%

- 36.4%

Underwriting profit/loss (before MMIP) (%)

1.1

0.6

5.5

4.1

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

-45.5%

- 25.5%

* Underwriting margin = underwriting profit before MMIP and allowance for doubtful debts/net earned premium

Portfolio Mix (30 June 2014)

26

Investment & Other Income

Deposits with FI, 20.2%

Wholesale funds, 50.3%

Equity securities,

4.4%

Loans, 0.1%

Debt securities,

25.0%

Investment & Other 1 Income (RM ‘mil)

4.7 4.5

12.0 13.2

Q2 2013 Q2 2014 YTD Jun 13 YTD Jun 14

-4.3%

+10.0%

* Investment yield for 3 months

1 Other includes realised gains & losses and other operating income

# Investment income (exclude rental income)/investment

Investment Yield #

1.0% 1.0%1.8% 2.2%

Q2 2013 Q2 2014 YTD June 13 YTD June 14

1H14 increased 10% yoy in investment & otherincome mainly driven by the realised gain fromdisposal of TIMB building in Q1 2014 & investmentincome from wholesale funds ;

Remain low risk investment with ~70% investment indeposits with FI & wholesale funds

**

27

This presentation has been prepared by Tune Ins Holdings Bhd (“Company”) in connection with the InterimFinancial Statements (unaudited) for the financial period ended 30 June 2014 and announced by the Companyon the Main Market of Bursa Malaysia Securities Berhad on 18 August 2014.

Information contained in this presentation is intended solely for your reference. Such information is subject tochange without notice, its accuracy is not guaranteed and it may not contain all material informationconcerning the Company. Neither we nor our advisors make any representation regarding, and assumes noresponsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any informationcontained herein.

In addition, the information may contain projections and forward-looking statements that reflect theCompany’s current views with respect to future events and financial performance. These views are based oncurrent assumptions which are subject to various risks factors and which may change over time. No assurancecan be given that future events will occur, that projections will be achieved, or that the Company’s assumptionsare correct. Actual results may differ materially from those projected.

Disclaimer

Tune Ins Holdings Berhad - Investor Relationsir.chartnexus.com/tuneinsurance/docs/presentation/q2_2014.pdfAnalyst Presentation August 2014. 2 Agenda Key Highlights 1 Online Insurance

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