ANL 33.60 Increased By ▲ 0.50 (1.51%)
ASC 14.53 Increased By ▲ 0.18 (1.25%)
ASL 24.88 Increased By ▲ 0.40 (1.63%)
AVN 91.39 Decreased By ▼ -1.11 (-1.2%)
BOP 9.10 Increased By ▲ 0.04 (0.44%)
BYCO 9.80 Increased By ▲ 0.10 (1.03%)
DGKC 133.25 Increased By ▲ 1.06 (0.8%)
EPCL 50.28 Increased By ▲ 0.18 (0.36%)
FCCL 24.40 Increased By ▲ 0.10 (0.41%)
FFBL 24.29 Decreased By ▼ -0.11 (-0.45%)
FFL 15.12 Increased By ▲ 0.10 (0.67%)
HASCOL 10.60 Increased By ▲ 0.04 (0.38%)
HUBC 86.02 Increased By ▲ 0.92 (1.08%)
HUMNL 6.80 Increased By ▲ 0.05 (0.74%)
JSCL 25.70 Increased By ▲ 0.45 (1.78%)
KAPCO 41.00 Increased By ▲ 2.25 (5.81%)
KEL 3.96 Decreased By ▼ -0.02 (-0.5%)
LOTCHEM 14.54 Increased By ▲ 0.11 (0.76%)
MLCF 46.10 Increased By ▲ 0.22 (0.48%)
PAEL 37.02 Increased By ▲ 0.32 (0.87%)
PIBTL 11.38 Decreased By ▼ -0.05 (-0.44%)
POWER 10.25 Increased By ▲ 0.10 (0.99%)
PPL 90.50 Increased By ▲ 0.80 (0.89%)
PRL 26.50 Increased By ▲ 0.25 (0.95%)
PTC 8.66 Increased By ▲ 0.06 (0.7%)
SILK 1.35 No Change ▼ 0.00 (0%)
SNGP 41.30 Decreased By ▼ -0.10 (-0.24%)
TRG 144.80 Increased By ▲ 1.70 (1.19%)
UNITY 30.10 Increased By ▲ 0.31 (1.04%)
WTL 1.40 Decreased By ▼ -0.02 (-1.41%)
BR100 4,925 Increased By ▲ 36.63 (0.75%)
BR30 25,546 Increased By ▲ 270.19 (1.07%)
KSE100 45,536 Increased By ▲ 257.29 (0.57%)
KSE30 19,055 Increased By ▲ 156.4 (0.83%)

The already low penetration of the insurance sector has come under further pressure with currency depreciation and slower economic and industrial activity, which has pushed up insurance premium in the non-life segment.

Against the backdrop, EFU General Insurance Limited’s (PSX: EFUG) financial performance for CY19 has been sanguine. EFUG is a non-life insurance company with products in the motor, marine, fire & property segments, and others such as travel liability, money, credit card insurance. It announced CY19 financial performance recently where its EPS rose by 20 percent year-on-year despite flattish growth in EFUG’s net insurance premium – topline. It also announced a cash dividend of Rs5.5 per share in addition to first, second and third interim dividend of Rs4.5 per share already paid.

EFU General Insurance Limited - Unconsolidated accounts
Rs(mn) CY19 CY18 YoY
Net insurance premium 7,460 7,562 1.4%
Net insurance claims 3,549 3,089 14.9%
Net commission and other acquisition costs 556 588 -5.3%
Management expenses 2,849 2,579 10.5%
Underwriting results 505 1,307 -61.3%
Investment income 2,262 1,612 40.3%
Rental income 112 104 8.0%
Other income 219 161 35.8%
Chainge in fair value of investment property 434 11 3962.3%
Other expenses 51 50 1.6%
Result of operating activities 3,482 3,145 10.7%
Finance cost 14 -
Resversal of workers' welfare fund 146 -
Profit from Window Takaful operations - Operator's Fund 214 117 82.3%
Profit before tax 3,827 3,262 17.3%
Income tax expense 1,219 1,091 11.7%
Profit after tax 2,609 2,171 20.1%
EPS (Rs/share) 13.04 10.86 20.1%
investment income 30.3% 21.3%
PAT/Net Premium 35.0% 28.7%
Underwriting Results/ Net Premium 6.8% 17.3%
Net Claims/Net Premium 47.6% 40.8%
Net Commission /Net Premium 7.5% 7.8%
Management expenses/Net Premium 38.2% 34.1%
Source: PSX

Compared to a 22 percent decline in 9MCY19 profits, growth in CY19 earnings was a pleasant rebound, which grew primarily due growth in investment income – usually a big chunk of revenues for insurance companies that diversify risk.

EFUG’s net insurance claim and management fee grew moderately by 15 and 10 percent year-on-year, while net commission and acquisition cost came down by 5 percent year-on-year. However, growth in these costs resulted in sliding underwriting results to premium ratio.

The investment income increased by 40 percent, year-on-year, which was of key support to EFUG’s bottomline and came from higher interest rate environment in the country. Additional income from Takaful operations also supported the bottomline.