Airasia

It was proxy for growth in air travel without undertaking the airline industry’s inherent risks such as volatile fuel price and air ticket price cuts.

The exclusivity agreements signed with Airasia allow Tune Ins to tap Airasia’s 37 million passengers (and growing) and dominance in the SEA low cost carrier market with new market expansion potential such as India.

It had entered into two partnerships with Cebu Pacific and UAE. The new tie ups illustrate Tune’s ability to grow beyond its current (March 2014) tie up with Airasia (renewal of the current ten year agreement a key risk).

Tune Ins was still in its infancy and see further potential in penetration rates, revenue per customer in travel insurance and ancillary sales, as well as margin improvement in its general insurance as portfolio mix improves.

Its key catalysts include Airasia India and Thai Airasia X starting operations, positive execution with new partnerships, tourism boom with Visit Malaysia Year 2014 and margin improvement in general insurance.

Key risks include over reliance on the exclusive status from Airasia, selling pressure if key shareholders meet regulatory ownership requirements, adverse claims developments (with reinsurance for large events) and adverse regulatory risks.