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Ray Titus asked 10 months ago

Hi Team,
Based on Victors video explanation for inter-segment it’s recommended to be removed and focus only on external customer figures. What if the company has majority of it’s business from inter-segment? ie investment holding revenue mainly from life insurance company which both are part of the group?

Should we include the total figure instead of removing inter-segment? Also because of higher depended on inter-segment revenue and if we do not include those figures; the profit margin are off the chart!
Looking forward to your advice.

TQ!

2 Answers
Victor Chng answered 10 months ago

Hi Ray,
 
You may want to let me know the company name so I can look through it to understand your context. 

Ray Titus replied 10 months ago

Hi Victor, thanks for the reply.

I’m looking at Allianz Malaysia whereby their investment holding revenue are mainly generated from their other segments.

Victor Chng answered 10 months ago

Hi Ray,

According the 2019 annual report, under note 36, their segment is as follow:

Investment Holding
General Business
Life Insurance

 

The investment holding have an inter-segment of RM202m, yes this figure should not be taken account. I don;t think that is the life insurance business as they have a life insurance segment there already.

Do note also, investment quadrant method cannot be use to analyse banks and insurance business as it require different sets of understanding of the business model and financial ratio to analyse them.

Ray Titus replied 10 months ago

Hi Victor,

Thanks again for the response. Much appreciated on your feedback in regards to this matter. Will take note on analysing inter-segment information.