HNB Assurance posts 43% profit growth

HNB Assurance PLC reported a 43% growth in its Profit After Tax ( PAT ) according to the interim financial statements for the year ended December 31, 2012 released to the Colombo Stock Exchange. The company's profit after tax recorded Rs. 351 million while its profit before tax also grew by 45% to reach Rs. 394 million. Turnover recorded a modest growth of 8% fuelled by the Gross Written Premium (GWP) from Life Insurance which grew at an impressive rate of 16% .

Manjula de Silva

The growth in GWP from General Insurance stood at 1% due to the company's decision to defend its pricing structure at an economically viable level amidst heavy price competition.

This strategy enabled the company to record a considerable improvement in its underwriting profitability from the General Insurance business. As a result, the profit after tax from General Insurance business grew by 151% and accounted for a share of 53% of the total profit. The profit from Life Insurance recognized as a transfer of surplus from the Life Fund declined marginally by 4% and accounted for a share of 47%.

This is the first time since 2006 that General Insurance has contributed to a larger share of the company's profit after tax and reverses the trend seen in recent years.

The Company's Earnings per Share (EPS) grew to Rs. 7.02 recording a 37% growth while its Return on Equity (ROE) stood at 19%. This strong performance enabled the company to declare a dividend of Rs. 2.75 per share which was 31% higher than the dividend declared for the previous financial year.

Commenting on the Company's achievement of results for the year ended December 31, 2012, Manjula de Silva, Managing Director,

HNB Assurance PLC feels that the Company has done exactly what it sets out to do in 2012. "We aimed to accelerate the growth of life insurance business while executing a twofold strategy of achieving a moderate growth in general insurance business while improving profitability. The results delivered in 2012 are fully consistent with these stated goals" he stated while expressing the Company's desire to target a faster rate of growth from General Insurance in 2013 while protecting its vastly improved level of profitability.