Janashakthi Insurance PLC., (Janashakthi) recorded a 15% Year-on-Year (YoY) growth in consolidated Gross Written Premium (GWP) in the first nine months of 2015 to end the quarter with a consolidated GWP of over Rs.7.351 billion and Profit Before Tax (PBT) of Rs.337 million.
The company’s life insurance business posted a YoY growth of over 19% to realize a GWP of Rs.1.835 billion, a result of strategic changes made to the sales structure during the last financial year. The non-life business achieved a GWP of Rs.5.516 billion, a YoY increase of over 14%. By the end of the quarter the insurer had honoured claims of Rs.3 billion in non-life claims and Rs.623 million in life claims. The rise in claims settlements was one of the key factors which had an effect on the company’s profits which saw a dip from the PBT of Rs.609 million reported during the same period last year to Rs.337 million.
The company’s asset base grew to Rs.23 billion during the period under review, with 72% of assets being held as financial investments in a balanced investment portfolio. The Life Insurance Fund recorded a 19% increase, growing from Rs.7.3 billion at the end of 2014 to Rs.8.7 billion as at 30thSeptember 2015.
“Continuing ahead with the momentum gained during the first half of the year, I am pleased to report that we have posted yet another quarter of strong performance. Both life and non-life segments registered impressive top line growth. These numbers are a reflection of the business’ sound fundamentals and the trust and goodwill we have earned amongst our stakeholders,” said Mr. Prakash Schaffter, Managing Director, Janashakthi Insurance PLC.
Post the quarter performance, Janashakthi Insurance PLC., announced the acquisition of AIA General Insurance Lanka Limited for Rs.3.2 billion, further consolidating its position as the 3rd largest general insurer in Sri Lanka. The amalgamation of AIA General Insurance Lanka Limited and Janashakthi General Insurance Limited will result in the combined entity accounting for an estimated GWP of Rs.11 billion with a market share of approximately 17.5%.
Commenting on the acquisition, Mr. Prakash Schaffter noted, “We saw a great strategic fit in AIA’s Sri Lankan general insurance business. We strongly believe that this acquisition offers attractive growth opportunities for all stakeholders. Bringing a broader range of insurance solutions to customers, the increased scale of the business will help drive better profitability for shareholders. As we work on integrating the two units, we look forward to leveraging their synergies to drive exponential growth as we work towards achieving market leadership.”
Sri Lanka’s Janashakthi Insurance net profits dropped 56 percent to 102 million rupees in the September quarter against a year earlier amid increased benefits and claims, the firm’s interim accounts showed.
Gross written premiums rose 15 percent to 2.5 billion rupees with net premiums also up by 15 percent to 2.2 billion rupees.
Gross written premiums comprised of 606 million rupees of total life premiums and 1.9 billion rupees of total non-life premiums.
Fee and commission incomes were up 20 percent to 72 million rupees and investment incomes dropped 13 percent to 362 million rupees.
Underwriting and net acquisition costs were up 15 percent to 426 million rupees while net benefits and claims were also up by 20 percent to 1.3 billion rupees.
Total benefits, claims and net acquisition costs rose 15 percent to 2.0 billion rupees.
Janashakthi Insurance as part of segregation requirement of Insurance Board has transferred 635 million rupees of assets to the Life Fund of former National Insurance Corporation (NIC) maintained separately to bridge the Policyholders’ Fund deficit.
The NIC Policyholders’ Fund had a negative solvency of 39 million rupees for the quarter ended 30 September 2015.
“The solvency deficit reported for this period was mainly due to the Policyholders’ liability not being valued for the purpose of calculating solvency margin, quarterly.” the firm said.
The Total Assets of the company as at 30 September 2015 was 23 billion rupees out of which 72 percent is represented by financial investments placed by the company.
In October 2015, Janashakthi Insurance entered into a share purchase agreement with AIA Insurance to acquire the entire shareholding of its subsidiary, AIA General Insurance.
The firm purchased the entire share comprising 18,780,167 ordinary shareholding of AIA General Insurance for a total consideration of 3.2 billion rupees.
The firm is to have a rights Issue of one new ordinary share for every two ordinary shares held in the capital of the company at a price of 18.50 rupees per share.
* Net Assets Value per share of Janashakthi Insurance PLC as at 30th September 2015 was LKR 12.04.
* Janashakthi Insurance PLC recorded a 15% Year-on-Year (YoY) growth in consolidated Gross Written Premium in the first nine
months of 2015, reaching the consolidated Gross Written Premium (GWP) of over LKR 7,351 million during the period under review.
