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% .
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
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.