Not all are convinced that it is a golden goose. Critics said that it is highly dependent on one major client – Airasia Bhd. This exposes Tune Ins to indirect risks.
It operates two core businesses, the first being online based – it sells travel insurance to customers of Airasia, Tune Hotels, Airasia Expedia and Cebu Airlines as part of ticket/room booking. The other core business is general insurance.
While it gas only one license in Malaysia to conduct general insurance, its online business model enables its travel insurance to be underwritten by local insurance partners in 15 countries in the Asia Pacific, which reinsure these to Tune Ins’ reinsurance subsidiaries in Labuan.
This online distribution model is low cost and high volume and is profitable.
Airasia’s expansion plans will inevitably boos the take up rates of online insurance, in tandem with increasing flight passengers.
The travel insurance business contributes the bulk of Tune Ins’ bottom line, about 75% due to its high profit margin. However the biggest contributor to the company’s revenue, as high as 70% actually is its general insurance business.
It is getting a good mix – motor, fire, personal accident, marine cargo, oil and gas.
Tune Ins’ catalysts include the swift expansion of its travel insurance business, potential tie-ups with more airlines, the revamp of its general insurance business in Malaysia and the planned earnings per share accretive acquisitions of small to midsized insurers in several countries.
Its major shareholders are Tune Money Sdn Bhd and Airasia Bhd with 55.85% and 16.19% stake respectively. Shareholders of Tune Money Sdn Bhd are Tony and Datuk Kamarudin, Kalimullah Hassan, Lim Kian Onn.
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