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Last Updated : 2024-04-26 02:12:00
The local unit of the third most valuable Asiabased insurer, AIA Insurance Lanka PLC group increased its net profit for the quarter ended March 31, 2016 (1Q16) by 130 percent to Rs. 86.5 million from year ago as the life insurer is seen consolidating its market position, the interim results showed. The earnings per share was up from Rs.1.22 to Rs. 2.81. The performance was largely supported by the growing gross written premiums (GWPs) from its life business as the company sold its general insurance business last year.
The AIA share closed at Rs. 279.90 yesterday, Rs.1.60 or 0.57 percent higher. The GWPs rose by a strong 30 percent year-onyear (yoy) to Rs. 2.37 billion. The group in October 2015 divested its fully owned subsidiary, AIA General Insurance Lanka Limited to Janashakthi Insurance PLC for a consideration of Rs.3.2 billion, which resulted in a gain of Rs.1.27 billion. AIA General Insurance Lanka Limited incurred a loss of Rs.78.8 million up to the date of the divestiture, turning from a net profit of Rs.89.6 million posted for the financial year ended December 31, 2014. With the sale of its general insurance unit, the life insurer will consolidate its position in the Sri Lankan market which has the lowest life insurance penetration in the region. Sri Lanka’s life insurance penetration stands woefully low at just above 0.5% of GDP (based on GWP). The company, however, did not say what it was going to do with the funds at hand but either they could invest in the business or remain open for acquisitions as the Lankan insurance industry is overcrowded.
Currently there are 30 insurance companies - 12 life insurers, 15 non-life insurers and 3 composite insurers. The new insurance company, Capitallife, once launched, will be the 13th life insurer to be opened in Sri Lanka. Meanwhile, AIA saw its investment income growing by 25 percent yoy to Rs. 1.1 billion. However the fair value losses on the company’s trading portfolio rose to Rs. 344.2 million from Rs.156.3 million incurred during the same quarter last year. The net claims and benefits paid during the quarter edged up by 2.8 percent yoy to Rs. 1.22 billion
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