InvestCap analysed a sample of 21 companies of the total 22 listed companies amid excluding Pakistan Reinsurance as it is a reinsurance company.
Meanwhile, net premium increased only 8% during January to September, according to an InvestCap research note.
PICIC Insurance’s net premium rose by a solid 47% during the period under review, the highest surge in the sector. On the other hand, Central Insurance’s net premium was down 91% owing to company’s earlier decision to discontinue insurance business and operate only as an investment company, adds the note.
Claim ratio significantly improving by 4 percentage points to reach 59% compared with the same period last year.
The combined ratio, also known as core profitability ratio, of the sector also improved and stood at 12% against last year’s 8.5%.
While core income improved, net investment income of the companies significantly supported sector’s bottom-line as it showed a quantum leap of over 200% in the first nine months of 2011.
As far as stock performance of the sector is concerned, such significant financial performance could not make much impact on investor interest as the sector declined by 8.5% in 2011 so far.
This may be due to the fact that investors are reluctant to invest in the insurance sector given prevailing market conditions and volatile nature of the business, says the note.
Industry giant Adamjee Insurance Company Limited (AICL) posted an EPS of Rs0.42 during July to September 2011 against a loss incurred by the company in the same period last year.
The main reason for the loss was significantly increased claim ratio amid floods hitting the country, says the note.
The company turned into profits despite booking a loss of Rs0.09 per share from its Middle East operations.
Published in The Express Tribune, November 11th, 2011.
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