Fine-tuning for Tune Insurance

An Ever Expanding Pie?

The CEO of Tune Insurance Berhad (TIB) Peter Miller wants to triple the company’s market value to RM 6 billion by 2018.

How?

By way of capitalising on AirAsia group’s rapid growth, as he plots expansion into neighbouring countries.

“If we can improve take-up rates as well, AirAsia’s contribution can be reasonably expected to somewhat nearly double over that timeframe,” he told reporters after its AGM yesterday (6 June 2014).

TIB provides online travel protection products for AirAsia and has established partnerships with Cebu Pacific and Air Arabia. Miller said the company was keen to expand its services to include other full service and low-cost airlines.

Low-cost carrier AirAsia  owns 16.2% of Tune Ins, while Tune Group Sdn Bhd, controlled by Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, is its single largest shareholder with a 25% stake.

Miller said it would work hard to benefit from the natural growth of AirAsia and AAX, especially with new plane deliveries, as well as new AirAsia entities such as AirAsia India and AAX Thailand.

The group is also focusing on integrating the business of 49%-owned Thai insurer Osotspa Insurance into the group, with a re-branding exercise to be launched soon.

“We are very optimistic about the shareholder value we can create in Thailand over the next two to three years. And of course, the online insurance business sales will grow over time,” Miller said.

Currently, the company has a market capitalisation of RM 1.8 billion.

On its expansion into Indonesia, Miller said TIB had identified a new target to acquire by the year-end and that it was commencing the registry process.

“We are still optimistic we will own a company in Indonesia before the end of the year. Ideally, we want to get Thailand down first because a lot of what we will do in Thailand is what we can pick up and replicate in Indonesia,” Miller said.

Currently, TIB has 14 insurance partnerships in 18 markets in Asia and plans to increase its partnerships in the Middle East-North Africa region to 30 by year’s end.

So, when do you think is the right time to go into this counter?