IGI Insurance (KSE symbol: IGIIL) has been the investors darling for some time now. Subsequent to its downfall in 2012, IGIIL has made an impressive comeback by managing to deliver overwhelming profitability growth rates year after year.
CY13 was a phenomenal year but this year was no less. Its bottom line flaunted a gigantic rise of 71 percent year-on-year in CY14. This was impressive particularly that the top line was on a downfall. Here, the saviour became the sudden decline in claims expenses, which took the claims ratio to 57 percent from 72 percent in the preceding year.
Thanks to the improving claims, underwriting profits rose nearly twofold. Another treat for IGIIL was the healthy rise in investment income. This is the outcome of firms highly-flavoured investments in equities. Mind you, the investment portfolio of IGIIL is highly skewed to equities. Hence, this surge in investment income is clear outcome hefty capital gains and dividend income from equities.
Moreover, IGIILs bliss was not over here. General and administrative expenses also inched down by 21 percent. Perhaps, this is due to the high-base effect as last year the due diligence of IGI Investment Bank and the acquisition of ALICO led to a massive jump in expenses of the company.
=========================================================
IGI Insurance - Financial Highlights
=========================================================
Rs (mn) CY14 CY13 chg
=========================================================
Net premium revenue 1,045 1,066 -2%
Net claims expense (594) (766) -22%
Management expenses (336) (287) 17%
Net commission 94 92 2%
Underwriting result 209 105 99%
Investment Income 941 691 36%
Financial Charges (74) (41) 80%
General & administrative expenses (188) (238) -21%
Profit before taxation 943 555 70%
Taxation (119) (74) 61%
Profit after taxation 824 481 71%
EPS (Rs.) 6.71 3.92
=========================================================
Source: KSE announcement
Comments
Comments are closed.