PETALING JAYA: The pressure on Allianz Malaysia Bhd’s bottom line is expected to ease in the final quarter (Q4) of the financial year ending Dec 31, 2021, as the economy reopens after a period of national lockdown to contain the Covid-19 pandemic.

       Analysts are optimistic that the insurance group would see an improvement in its earnings, lifted by the recovery of both of its life and general insurance segments.

       TA Research noted Allianz would continue its strategic initiatives to strengthen its agency force and invest in building distribution capabilities.

       “Following the full opening of economic activities in October, we are cautiously optimistic on the outlook for both the general and life insurance segments,” the brokerage said in its report yesterday.

       TA Research reiterated “buy” on Allianz, with an unchanged sum-of-parts (SOP) based target price of RM17.52.

       Allianz’s net profit fell 10.8% to RM115.2mil in Q3’21 from RM129.1mil in Q3’20 on higher claims provision and fair value losses on investment in its life insurance segment.

       Its revenue rose marginally to RM1.58bil in Q3’21 from RM1.53bil in Q3’20 on higher gross earned premiums and investment income. For the nine months to September 2021, Allianz’s net profit declined 13.9% to RM323.8mil from RM376.3mil in the corresponding period last year, despite a 7.7% rise in revenue to RM4.76bil from RM4.42bil.

       RHB Research deemed Allianz’s results as below expectations, noting this was largely on lower-than-expected investment income and weaker-than-expected core pre-tax profit from its life business.

       The brokerage, however, said Allianz could see a better Q4’21 ahead on economic reopening. It kept a “buy” rating on Allianz, with an unchanged SOP-derived target price of RM17.30.