- 2Q26 PAT of RM6.4 million underpinned by favourable claims experience and stronger investment income
- Continued growth trajectory on Non-Travel segments offsetting challenges from geopolitical conflict
- Investment income improved QoQ on easing market volatility due to the Middle East conflict
On a Year-on-Year (“YoY”) basis, the Group reported a decline of 33.2% in PAT due to lower investment income and softer Travel performance in 2Q26, though this was partially offset by growth in the Non-Travel segment. Net insurance service result improved by 45.2% encouraged by lower acquisition cost and reinsurance premium from Non-Travel growth.
The financial performance was boosted by combined ratio improvement of 3.1 percentage points YoY to 90.9% reflecting better acquisition cost amortisation and improved allocation of reinsurance premiums. The Group also showed strong QoQ investment income growth of 21.5% as the US–Iran ceasefire announced last April eased market uncertainty and buoyed overall earnings.
“The Group’s 2Q26 performance shows our continued recovery on a quarterly basis led by the resilient Non-Travel segment, disciplined underwriting and a more encouraging investment environment,” said How Kim Lian (“How”), Group Chief Executive Officer of Tune Protect.
Non-Travel Growth Cushioned Soft Travel Demand
Resilience of the Non-Travel (in-country general insurance) segment amid weakened travel demand was also critical in the Group’s improvement in its 2Q26 earnings performance. Gross Written Premium (“GWP”) in the Non-Travel segment grew 10.1% YoY on the Group’s continued strategic expansion in the Motor segment and broader affinity partnerships. The growth underscores the increasing contribution of the Non-Travel segment in diversifying the Group’s earnings base and cushioning the impact of the Travel segment.
Despite lower travel demand and subdued airline passenger volumes, continued growth in the Group’s Business-to-Business (“B2B”) and Online Travel Agency (“OTA”) channels diversifies Tune Protect’s regional Travel portfolio and partially mitigated weaker airline-related volumes.
The Group’s insurance revenue moderated YoY mainly due to the decline in performance of the Travel segment. However, this was partly offset by growth in the Non-Travel segment supported by longer earning periods. Combined ratio improved YoY in 2Q26. However, in 1H26 combined ratio weakened by 1.3 percentage points YoY mainly due to higher net incurred claims, reflecting the portfolio mix shift towards Non-Travel.
In 1H26, moderation in the Group’s insurance revenue was primarily attributed to softer performance in the Travel segment, impacted by market uncertainty surrounding geopolitical tensions in the Middle East, evolving travel patterns, and the removal of pre-selected travel insurance option in Thailand.
Group performance – 2Q26 and 1H26 Financial Overview
Note: Amounts presented may not foot due to rounding
Improved Investment Income On Easing Market Volatility
In 2Q26, the Group’s investment income improved QoQ on reduced market volatility following the US–Iran ceasefire in April although inflationary and geopolitical risks remain. In 2H26, the Group plans to increase exposure to longer-duration corporate bond funds to capture more attractive yields, supported by Bank Negara Malaysia’s (BNM) neutral Overnight Policy Rate (OPR) stance.
The Group’s growth in the Non-Travel segment was underpinned by key growth areas comprising foreign worker protection, the motor ecosystem, fire insurance, as well as solar panel insurance.
“The Group is expanding its Non-Travel portfolio through a combination of core business lines, strategic partnerships and agency-led expansion. We will continue our diversification plans across various growth segments and distribution channels that will provide multiple avenues for sustainable growth and long-term value creation,” said How.
Healthy Portfolio Quality, Expanding Regional Footprint
The in-country general insurance (Non-Travel) segment grew favourably YoY in GWP as the Group maintained a healthy Motor portfolio quality with a strong focus on profitability. Claims ratio improved by 4.0 percentage points supported by continued optimisation of the portfolio mix. Growth was led by the Private Car and Motorcycle segments driven by the Agency channel and Affinity partnerships. In addtition, Foreign Worker medical insurance was further expanded through the largest government-approved platform that supports continued growth in the Non-Travel segment.
The Group remains committed to its strategic regional business with focus on top-line growth and scale. Despite a 23.2% YoY decline in Travel GWP, the business implemented price optimisation initiatives across its Travel products, narrowing average premium gaps while maintaining competitiveness. This contributed to a stronger customer value proposition and drove a higher take-up rate, which increased by 8.0 percentage points YoY.
As part of its growth strategy, the Group expanded into new distribution channels through B2B partnerships in Thailand, Vietnam and Malaysia, while leveraging its AirAsia WANO relationship to enhance conversion rates and broaden customer reach. Additionally, the Group continued to strengthen its value proposition through the integration of Value Added Services (“VAS”), supporting improved customer engagement, greater product differentiation and higher take-up rates (TUR) across its travel insurance offerings.
“We recognise that the Travel sector remains challenging, with evolving market conditions requiring businesses to stay agile and responsive. Despite these challenges, we are well-positioned to drive growth by scaling our B2B channels with online travel agencies and top-tier travel partners. Coupled with optimised pricing strategies, VAS and targeted campaigns, these efforts are designed to enhance conversion and attachment rates while delivering greater value and protection to travellers across markets,” said How.
Building Scalable Growth Through Vertical Expertise and Travel Ecosystem Expansion
The Group continues to expand its Vertical Expertise segment focusing on growing beyond its traditional insurance business and building scalable, capital-light income streams. Although ancillary and technology fee income declined slightly by 0.4% YoY, the segment delivered 4.0 percentage points improvement in gross margin.
In enhancing customer value and diversify revenue streams, Tune Protect continues to expand its ancillary offerings across the Travel ecosystem. The ancillary shelf now spans 30 merchants across eight categories, including connectivity, airport lounge, ground transfer and mobility, telehealth, motor care and lifestyle services. During the quarter, the Group also rolled out its Claimless Services offering on the AirAsia channel, with expansion to additional channels planned. Further strengthening its travel value proposition, Tune Protect is set to launch airport lounge for Business Class and a standalone lounge pass sold in-path, with a targeted rollout in 4Q26. These initiatives are aimed at delivering a more seamless and rewarding travel experience while creating additional opportunities to drive customer engagement and attachment rates.
Outlook
The Group expects the operating environment to remain challenging in the second half of 2026 amid continued geopolitical uncertainties, which may continue to affect international travel demand, market sentiment and investment market performance. Nevertheless, the general insurance market is expected to remain resilient, supported by stable domestic economic activity, while demand for value-added insurance solutions and digital services is expected to continue providing growth opportunities.
“We will continue to strengthen our core insurance business by focusing on disciplined underwriting, prudent claims management and cost optimisation, while accelerating growth in our Non-Travel portfolio. Building on the portfolio rebalancing initiatives undertaken over the past year, we will continue enhancing the quality of our business mix, expand distribution capabilities and deepen collaborations with strategic partners to support sustainable underwriting performance,” How concluded.
