MNRB aims for Asia’s top five

MNRB Holdings Bhd’s share price tested 19-year highs of RM2.70 at the end of January on expectations the improvement in profitability in the first half of financial year 2025 ending March 31, 2026 (1H26) will carry through into 2H26.

The share price has retraced to RM2.41 but is still up some 16% year-to-date. The company will announce its third-quarter results this month.

Earnings in 1H26 were up 52% year-on-year to RM280.7mil or an earnings per share of 35.85 sen while revenue rose 9% to RM1.9bil.

Return on equity (ROE) improved to 11.5% in 1H26, reflecting stronger earnings driven by disciplined underwriting, efficient cost management, stronger investment income and improved capital efficiency.

MNRB’s interim president and group chief executive officer Datuk Rudy Rodzila Che Lamin tells StarBiz 7 that the group is moving towards growing its reinsurance and takaful business.

“We are writing the right portfolios at the moment.

“We are balancing the retail and corporate business for the takaful segment. We have strengthened our distribution to brokers, agency force and direct clients.

“We also have our new online channel to market products and services, and this is growing very fast.

“We want to grow the reinsurance business and become a top-five player in Asia. It’s a blue ocean for us.

“Awareness of insurance is greater now. The demand for reinsurance business is big because insurance business is growing everywhere,” he says.

Key priorities for the group include strengthening underwriting governance, diversification of portfolio, optimising portfolio mix towards higher-margin segments, strengthening investment returns, enhancing capital efficiency and driving operational productivity.

MNRB’s core reinsurance business, under Malaysian Reinsurance Bhd (Malaysian Re) which undertakes general reinsurance, retakaful and family retakaful generates about 50% of its income in Malaysia and the rest from the region.

The ratio was 80% domestically about four years ago and 20% foreign.

Foreign underwriting will drive growth for the group going forward.

Rudy says MNRB is working with brokers and other reinsurers and local insurance players in the region for opportunities, which are ample due to economic development and urbanisation, not to mention climate catastrophic events as well as niche businesses like marine that the group is targeting.

To manage its risk exposure he says Malaysian Re will work with international players to maintain a very good loss ratio through retro programmes.

“We don’t think any capital injection will be required in the forseeable future. As for human capital, talent is important for us, to get the right people to join us,” he says.

MNRB’s takaful segment under Takaful Ikhlas is also growing in its own right.

Consisting of Takaful Ikhlas General Bhd and Takaful Ikhlas Family Bhd, the segment has undergone a transformation in the past three years.

The reinsurance business used to account for 90% of MNRB’s profit in the past but the growth of its takaful business has now contributed to 30% of the group’s profit.

Takaful Ikhlas General contributed about RM60mil to financial year 2025 (FY25) earnings while the Takaful Ikhlas Family raked in about RM12mil, according to Rudy.

Takaful Ikhlas General has enjoyed a 25% compounded annual growth rate in the past three years leading it to cross the RM1bil mark in premiums from about RM460mil at the beginning of 2022.

The business was ranked 21 in terms of market share out of 25 takaful and general insurance players in the market then and today it is ranked 10 out of 21 (post-industry merger and acquisitions).

Takaful Ikhlas General’s profit is growing accordingly from about RM20mil in 2021 and could hit RM70mil to RM80mil based on 1H26 numbers.

“In takaful, we are prioritising profitable segments, strengthening our core and regular business, and deepening strategic partnerships to drive recurring and sustainable growth,’’ he explains.

MNRB’s Takaful Ikhlas Family business is in a very competitive market, Rudy says.

However, it has developed a more active agency force and a new CEO has helped it turn in a profit.

Takaful Ikhlas Family’s 1H26 net profit rose 74% on-year due to higher revenue from its group credit term, group term and group hospitalisation portfolios, Maybank Investment Bank Research (Maybank IB) notes.

MNRB’s 1H26 profit was boosted by robust investment income stemming from both favourable fair value gains and lower unrealised foreign-exchange losses on foreign assets.

With some 50% of its funds in fixed income and deposits and the rest in equity, mainly Bursa Malaysia listed stocks, the improved market sentiment and prices could sustain in 2H26 ending March 31.

While climate-related events in the country in late 2025 and early 2026 may influence claims numbers, Rudy says it will be negligible as the people in the affected regions don’t really buy insurance for such events.

The Permodalan Nasional Bhd-controlled MNRB regularly pays dividends.

The most recent was 10 sen a share in FY25 and FY24 or a payout rate of about 20% of earnings.

Maybank IB has a “buy” call on MNRB with a target price of RM2.40 a share.

It expects the group to post a net profit of RM507mil for FY26 and maintain a 10-sen dividend for the year.