Corporate results: Jubilee Life posts 8.5% higher profits for first quarter of 2013

By Kazim Alam, The Express Tribune

KARACHI: Jubilee Life Insurance has made a profit of Rs127.3 million in the first quarter of 2013, up by 8.5% from the corresponding three-month period in 2012, according to a notice sent to the Karachi Stock Exchange on Thursday.

Speaking to The Express Tribune, Jubilee Life Insurance Chief Manager for Business Strategy and Special Projects Kashif Naqvi said the rise of 8.5% in the company’s after-tax profit was satisfactory if compared to profits of other life insurance companies in the same period. “Investment income of almost all insurance companies has dropped over this period. This has a direct impact on a company’s profitability,” he said.

Although premium revenues of Jubilee Life Insurance increased 34.8% over the three-month period, total revenues of the company increased by 19.3% mainly because of low investment income. Investment and other income was Rs842.1 million in the first quarter of 2012, but it dropped to Rs624.5 million in January-March 2013, reflecting a year-on-year decrease of 25.8%.

Naqvi declined to comment on the reasons of the significant drop witnessed in investment income, saying the question should be put to the company CEO. The Jubilee Life Insurance CEO did not respond to the questions that The Express Tribune sent him via email.

While total revenues increased by 19.3%, the company’s expenses also rose by 18.3% in the same period. “Comparing the increases in revenues and expenses does not make sense, as expenses are linked to premiums, and do not affect investment income,” Naqvi said. Although the notice sent to the KSE website does not state the company’s profit that is driven solely from its core business, Naqvi said its share was ‘substantial.’

IGI Insurance

The first quarter of 2013 proved to be a bad period for IGI Insurance, which reported net premium revenues of Rs265.6 million on Thursday, up by only 10.7% compared to the corresponding period in 2012.

According to a notice sent to the Karachi Stock Exchange (KSE) on Thursday, the slight increase in premium revenues was offset by a rapid surge in net claims, which rose by 36.7% to Rs205.3 million in January-March 3013.

Therefore, after taking into account the claims, expenses and net commissions, the actual underwriting result for the first quarter of 2013 remained Rs26.7 million. It was down by 149.8% compared to the corresponding period in 2012, when underwriting result was Rs66.6 million.

The profit-after-tax of IGI Insurance was Rs167 million in the three-month period, down by 36.2% compared to the corresponding period in 2012. The company’s earnings per share also decreased to Rs1.5 in January-March 2013 from Rs2.3 in the comparable period in 2012.

There are 39 non-life insurance companies in Pakistan. In 2011 – the latest period for which consolidated data is available for the entire insurance industry – the non-life insurance sector grew 16%, with total premiums of over Rs54 billion. About 65% of the market share in gross written premiums rests with three players, namely EFU General Insurance, Adamjee Insurance and Jubilee General Insurance.

Published in The Express Tribune, April 26, 2013.

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