LAHORE: All listed non-life insurance companies of Pakistan have announced their Q1 2011 results citing an impressive 60 percent growth in bottomline.
Excluding a large jump of Rs.255 million in earnings of Central Insurance, the sector profit growth come to 32 percent. Owing to stability in macro economic indicators, better equity values and higher interest rates, the growth in earnings stems from core underwriting business and higher investment income.
With better outlook of capital markets, gradual economic recovery and availability of ample avenues for business penetration, the overall scenario looks better for the insurance business.
Thanks to 9 percent growth in net premiums of the sector with net claims ratio remaining unchanged at 59 percent, underwriting business of the companies grew by an impressive 32 percent.
This 59 percent claim ratio is still considerably lower than the 64 percent claim ratio (in 2007) in the last five years.
Similarly, the combined ratio of the sector improved to 79 percent from 80 percent due to the lower expense ratio witnessed in Q1 2011.
Interestingly, administrative expenses remained controlled and grew by 7 percent. Moreover, high interest rate scenario, better capital markets and provisioning reversals led investment income to grow by an impressive 60 percent, thus further augmenting the bottomline of the non-life insurance sector.
Company wise performance shows that in Q1 2011 most of the companies posted a turn around in earnings. Central insurance posted the highest earnings growth of 392 percent primarily due to Rs142 million provision reversals while the largest insurer Adamjee's profit grew by 17 percent.
Copyright PPI (Pakistan Press International), 2011
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