Sri Lanka’s third largest general insurer by gross written premiums (GWPs), Janashakthi Insurance PLC (Janashakthi) group, posted a net profit of Rs.357.5 million for the quarter ended March 31, 2016 (1Q16), up 236 percent from a year ago due to the rise in general insurance premiums, the interim results showed.
The company’s earnings per share rose to 66 cents from 29 cents.
This is the first quarter since Janashakthi took over the general insurance arm of AIA Insurance Lanka PLC in October 2015 in a deal worth Rs.3.2 billion. The full amalgamation was completed in January 29, 2016.
The merged entity will also have a market share of 17.5 percent increasing from the current 11.4 percent based on the general insurance GWPs.
Since 2005 Janashakthi has been the distant third largest general insurer in Sri Lanka.
However, the acquisition brought the gap between Janashakthi and the first and the second operators - Ceylinco Insurance PLC and Sri Lanka Insurance Corporation Limited to just under Rs.1 billion based on GWPs as of 1H15 in the general insurance market.
The total gross GWPs rose 33.3 percent year-on-year (YoY) to Rs.3.32 billion during the quarter under review predominantly supported by the general insurance business.
The general insurance GWPs rose 43 percent YoY to Rs.2.7 billion out of which Rs.1.67 billion or close to two thirds came from motor insurance. Motor insurance premiums grew 33 percent YoY.
Meanwhile, the life insurance premiums rose only 0.5 percent YoY to Rs.608.4 million.
Sri Lanka’s life insurance penetration stands woefully low at just above 0.5 percent of gross domestic product (GDP) (based on GWP).
Currently there are 30 insurance companies—12 life insurers, 15 non-life insurers and three composite insurers.
A new insurance company, Capitallife is set to open shop as the 13th life insurer.
Meanwhile, Janashakthi paid Rs.1.54 billion worth of net benefits and claims during the period, up 44 percent YoY.
Investment income rose 33 percent YoY to Rs.431.1 million. Overheads of the group rose 25 percent YoY to Rs.652.7 million.
As of March 31, 2016, the holding company, Janashakthi PLC held a 75.92 percent stake in the company while Dunamis Capital PLC held a 3.17 percent stake being the second largest shareholders.
Bank of Ceylon held a 2.03 percent stake being the third largest shareholder.