AIA 3Q net hit by higher general insurance claims but life biz up

9 November 2015 03:02 am - 0     - {{hitsCtrl.values.hits}}

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The Sri Lankan unit of the third most valuable Asia-based insurer, AIA Insurance Lanka PLC (AIA) saw its net profits for the quarter ended September 30, 2015 (3Q15) falling by as much as 57 percent to Rs.22.8 million from a year ago amid a sharp increase  in general insurance claims, the interim results released to the Colombo Stock Exchange showed. 

The surplus of the life insurance business is reported annually at the year end and is therefore not included in the third quarter profit.
The earnings per share declined to 74 cents from Rs.1.72 a year ago. 

AIA share closed unchanged at Rs.308 at the end of last week’s trading. 

The higher importation of hybrid vehicles into the country has increased both the incidence of claims and the actual cost of claims as the price of the spare parts has risen due to the appreciation of the Japanese yen. 

However, the group gross written premium (GWP) rose 19.5 percent year-on-year (yoy) to Rs.3.13 billion. The total revenue which includes investment income remained virtually flat at Rs.3.91 billion. 

The total gross claims and benefits paid declined by 20.6 percent yoy to Rs.1.73 billion. 

AIA in October sold its fully owned general insurance subsidiary, AIA General Insurance Lanka Limited for a consideration of Rs.3.2 billion to Janashakthi Insurance PLC. Hence AIA’s general insurance results will cease to be consolidated from 4Q15 onwards. 

Meanwhile, for the nine months ended September 30, 2015 the AIA posted a net profit of Rs.95 million, down 52 percent from the same period last year due to same reasons. 

The earnings per share dropped to Rs.3.09 from Rs.6.46 a year ago. 

The GWP rose 17 percent yoy to 8.98 billion as both life and non-life segments increased their GWPs during the period. 

GWP of life business grew by 14 percent to Rs.6.1 billion while the GWP of general insurance increased by 30 percent yoy to Rs.2.9 billion. The total revenue grew by 3 percent yoy to Rs.11 billion, “mainly driven by increase in net earned premiums in both life and general insurance businesses, partly offset by reduced investment income due to movement in market value of equity instruments,” the company said in a statement.  

Operating and administrative expenses rose 13.8 percent yoy to Rs.3.3 billion. 

As of September 30, 2015, AIA Group held 97.16 percent stake in AIA Insurance Lanka PLC while the public shareholding remained at 2.84 percent.  
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