Janashakthi posts impressive profits

Janashakthi Insurance PLC has recorded an impressive 46 percent growth in net profit after tax reaching Rs 657 million during the financial year 2009. The company has attributed its success to the growth of sales despite challenging market conditions, successful cost management, a significant reduction of borrowing and financing costs and a positive achievement in relation to Debtor management.

Chairman W.T. Ellawala and Managing Director Prakash Schaffter. Picture by Saliya Rupasinghe

Janashakthi Insurance Chairman W.T. Ellawala said the cascading effects of the global financial downturn were compounded by the erosion of confidence set off by the collapse of several financial entities in the country.

“Insurance companies were directly affected by the negative sentiment, and the collective performance of the industry only grew by 3.7 percent and reflects the challenging times for the industry.

These challenging macro economic conditions gave us the opportunity to showcase our spirit of resilience making our performance in 2009 indeed noteworthy,” Ellawala said.

“We moved on with renewed vigour, meeting targets we had set out early last year.

Our strength was endorsed by RAM Ratings, which reaffirmed Janashakthi’s BBB+ rating as reflective of its strong competitive position, improving underwriting results and enhanced investment portfolio,” he added.

A sluggish business environment and less disposable income in the hands of the consumer compounded the challenges faced by the industry.

This state of affairs was evident in the marginal growth of 0.4 percent that our Life insurance business experienced, while our General insurance business reflected a positive growth of 8.5 percent.

The Non-Motor business achieved Rs 1.2 billion, a 17 percent growth compared to 2008 while Motor achieved Rs 3 billion, a growth of five percent.

The company’s Gross Written Premium (GWP) reached Rs 5.7 billion at 6.3 percent growth while the revenue was Rs 5.9 billion at 7.7 percent growth.

The total assets of company stood at Rs 10.7 billion while the Company life fund grew by approximately 12 percent to reach Rs 3.2 billion.

The company paid claims amounting to Rs 2.8 billion, which was 12 percent higher than 2008. Its total Gross Written Premium from Life reached Rs 1.43 billion while the Gross Written Premium for General was Rs 4.2 billion.

Janashakthi Insurance Managing Director Prakash Schaffter said, the performance is rendered all the more significant as it was achieved against the backdrop of the global financial crisis that impacted the Sri Lankan economy which was already battling against a number of setbacks that had resulted in a loss of confidence in finance companies.