TUNE Protect Group Bhd, launched with high expectations a decade ago, was first met with great optimism.
It performed relatively well immediately after its listing, and its stock price reached close to RM2 by August 2014, with a number of research houses having buy calls on the stock.
But a few years later, cracks begin to appear, brought on largely by the Covid-19 pandemic.
It has since struggled to live up to its early potential. Valued at RM1bil when it listed under the name of Tune Ins Holdings Bhd in February 2013, the insurance group now has a market capitalisation of just RM244mil.
There are many reasons why the group’s market value plummeted, says newly appointed chief executive officer (CEO), How Kim Lian, who has plans to to steer the group to better fortunes.
Predominantly known for its travel insurance, Tune Protect suffered a series of losses during the pandemic, as widespread lockdowns and travel restrictions across the globe hit hard. Its stock plunged to rock bottom in March 2020 when it traded at 26 sen a piece.
And recovery has been slow, with the stock price now hovering around 33 sen.
How is the third CEO of Tune Protect since its listing and has been the group’s chief financial officer since 2020. He was with AirAsia prior to that.
He says that following the impact of Covid-19 on the business, Tune Protect decided to shift strategies by expanding towards health and lifestyle insurance to offset losses from travel-related revenue.
“Tune Protect also launched Covid-19-specific insurance packages, which offered coverage for hospitalisation and quarantine, aiming to support travellers during the pandemic,” he tells StarBiz 7.
That didn’t do the trick.
In the third quarter ended Sept 30, 2020, Tune Protect recorded a lower profit of RM2.2mil compared to RM10.9mil for the same quarter a year earlier.
Losses began to show in the fourth quarter of FY2021, dragging the full year loss to RM15mil. The losses ballooned to RM34.4 mil in FY2022 but were reined in, with losses limited to RM947,000 by FY2023.
However, Tune Protect’s losses for the six months ended June 31, 2024 remain high at RM13.3mil.
This was due to various reasons such as impairment losses of claims recovery and losses from life insurance and general insurance, a clear sign that the company had been faltering in its core businesses.
How says the group has been actively working on stabilising its position by leveraging on partnerships. He adds that the travel insurance segment will remain a key focus going into 2025 as they enhance offerings especially within the South-East Asian and the Middle Eastern regions.
“We have an established network of insurance and underwriting partners across more than 50 markets. We are poised to bring onboard new partners with regional presence by being a one-stop service provider of tech and reinsurance.”
How says the uniqueness of Tune Protect lies in how the group can support regional players like airlines.
“AirAsia’s main business is flying to many different countries, as they keep adding more routes.
“In order to support this regional model, they need an insurance licence holder or insurance player to complete the coverage. That’s where we come in,” he further adds.
When most countries made it mandatory for travellers to have travel insurance that covered Covid-19 related medical costs, Tune Protect was in the right place to take advantage.
Today, it has strategic alliances with six airlines including AirAsia, AirAsia X, AirArabia, VietJet, SalamAir and FlyJinnah.
According to How, the alliances have allowed them to expand their reach while offering tailored travel insurance solutions to a broad customer base.
“As our partners continue to expand their fleet size and introduce new routes such as the visa-free routes which include India, China, Japan and South Korea, Tune Protect will grow its travel business to capitalise on the growing demand for insurance.”
How adds that regional business potential like Airbnb as well as Traveloka because they require more than just a general insurance provider.“How it works is, we reach out to our existing insurance partners. They will always come on a pre-agreed basis with us on what the products are, what they can underwrite, what is the percentage of commercials that they’re going to keep, and how much they’re going to give us.
“This enables us to activate the whole network when we have new airlines or new destinations,” he explains.
So, what’s next for Tune Protect in terms of products?
How says the group has kept a keen eye on what’s taking place around the world and what customers are looking for.
“Our new direction will focus on the customer experience and not just about selling insurance products. So we thought: as a passenger, what concerns people the most?,” he says.
With that, Tune Protect launched more niche riders like a premium lounge access in case of flight delays, allowing passengers to relax and unwind in the comfort of an airline lounge which is usually reserved for business and first class travellers.
How says the group also launched something called the “baggage tracker”, whereby upon a lost baggage claim, a hassle-free process will begin.
“It can be so difficult to call an airline or an airport and try and trace your luggage yourself. With this rider, the tracking of your luggage becomes an easier process and we believe this incremental kind of experience will ultimately differentiate us from a typical insurer.”
“Our operations in the Middle East, namely Dubai, have activated all these value-added services by working with relevant third party partners,” How points out.
The group will also be looking to partner with event organisers and ticketing agents to offer event cancellation and event tickets protection. How says he expects a stronger second half of 2024.
AirAsia’s target to increase capacity to 89% is also bound to give Tune Protect a boost.
He claims that the group has kept a close eye on high-margin products while maintaining cost discipline to improve profitability.
“We have reviewed its portfolio and will focus on the more profitable segments of the business while maintaining cost discipline to ensure favourable underwriting results. We remain cautiously optimistic that our business strategies and capital strength will continue to fuel growth for the group over the medium to longer-term.”