Corporate results: Jubilee Life Insurance chalks up healthy profit

Head of business strategy says company has consolidated lead.

KARACHI:

After-tax profit of Jubilee Life Insurance for 2013 clocked up at Rs941.4 million, which is over 70% higher than the company’s bottom line recorded in the preceding year, according to a notice sent to the Karachi Stock Exchange (KSE) on Tuesday.

Speaking to The Express Tribune, Jubilee Life Insurance Head of Business Strategy Kashif Naqvi said the growth in business along with controlled expenses and a better investment performance have led to better financial results for the company.

One of the largest players in the country’s life insurance industry, Jubilee Life Insurance also announced a final cash dividend at Rs3.50 per share, or 35%, which is in addition to an interim dividend already paid at Rs2.50 per share.

The company’s board of directors have also recommended that bonus shares be issued in the proportion of 15 shares for every 100 shares held.

Premium revenues net of reinsurance of Jubilee Life Insurance increased to Rs16.3 billion in 2013, which is 42.1% higher than premiums received in 2012. But noting that life insurance penetration in Pakistan is still at a low level of 0.38% of the gross domestic product (GDP), Naqvi said the company considers growth in premiums ‘satisfactory’. “However, (life insurance) companies growing at a slower rate may consider this growth extraordinary,” he added.

Investment income and other income increased 33.9% in 2013 which, according to Naqvi, is a result of the company’s prudent investment policy. “Better stock market performance coupled with the company’s policy to invest only in selected blue-chips stocks resulted in higher unrealised capital gains and higher dividend income,” he said.

Based on a steep rise in premiums and investment income, the company’s top line increased 40.6% in 2013 to Rs16.3 billion. Denying that the surge in revenues is a one-off event based on the low-base factor, Naqvi said Jubilee Life Insurance was the largest player in the private sector even in 2012 in terms of gross written premiums. “Furthermore, our company has registered growth of more than 40% in premiums in each of the last three years,” he noted.

Claims net of reinsurance increased 47.8% year-on-year in 2013. As for management expenses, which went up 16.8% last year, Naqvi said Jubilee Life Insurance maintained a strong focus on controlling them. “While the expenses linked to business acquisition rise in line with the growth in business, the administration expenses capitalise on economies of scales,” he said.

In terms of total gross premiums written during nine months ending September 30, 2013, the latest period for which industry-wide data is available, Jubilee Life Insurance came at the top with Rs11.8 billion.

“Based on the information available to date, we can confidently say that Jubilee Life Insurance has consolidated its lead as the largest private sector insurer in Pakistan,” Naqvi said.

Published in The Express Tribune, February 26^th, 2014.

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