PETALING JAYA: Tune Protect Group Bhd stands to benefit from diversifying its product offerings, which includes growing its general insurance segment even as other business divisions begin to recover.

       As the country’s macroeconomic environment starts to normalise, Kenanga Research noted that part of Tune Protect’s strategy is to introduce more lifestyle products, which is its most profitable segment.

       It added that the insurance provider has identified the younger consumer demographic as a segment with strong potential given existing insurance products that are not compatible enough with their spending habits.

       Consequently, Tune Protect seeks to introduce a range of personalised products that can be marketed in more affordable and customised bit-sized offerings that are assessable digitally.

       “Essentially riding on AirAsia’s product strategy of ‘pay-only-what-you-need’, these offerings include customisable home insurance plans that can be matched to market, student travel protection for studies, and pet travel coverage,” said Kenanga.

       “Currently, the group has 42 partners within a wide range of services besides airlines, including property, e-commerce, e-wallets, telcos, logistics and will likely ink more partnerships along the way.

       “A strong digital backbone should translate to cost savings as the group scales (supporting heavy volumes of claims processing, quotations, and customer support) as a disruptor from traditional platforms,” said the research firm.

       Meanwhile, Tune Protect’s travel segment is expected to recover as flights are poised to resume. That said, Tune Protect has also reduced its dependency on AirAsia as it has formed partnerships that gives it strong regional exposure in the Middle East and Asean, where Covid-19 restrictions are looser.

       According to Kenanga, in the second quarter of FY21 AirAsia comprised of less than 10% of the group’s business from about 90% pre-pandemic.

       It said that the motor insurance segment, which makes up 30% the Tune Protect’s gross written premiums, is also expected to normalise with the economic reopening and rebound in consumer spending.

       The research house anticipates Tune Protect’s earnings per share to grow 62% and 27% in FY21 and FY22 respectively.

       The travel insurance segment’s contribution is down to only 5% to 7% of the group’s gross written premium due to Covid-19 restrictions, from about 20% previously.