United Insurance posts 30% rise in net profit

JAN TO SEP 2020 FINANCIALS

• Tk7.13 net profit during the 9-month period
• EPS stood at Tk1.6
• NAV per share was Tk34.29
• Gross premium was Tk32.16 crore
• Net premium was Tk22.27 crore

United Insurance Company Ltd has posted a 30.25% increase in its net profit during the first nine months of this year, amid the Covid-19 pandemic.

During January to September 2020, the company's net profit was Tk7.13 crore, which was Tk5.47 crore in the same period of the previous year.

The company's earnings per share (EPS) was Tk1.6 for the nine-month period of 2020, which was Tk1.23 for the same period of 2019, stated the company's disclosure on the Dhaka Stock Exchange (DSE) website on Wednesday.

Khawja Manzer Nadeem, managing director and CEO of United Insurance told The Business Standard, "The net profit surged because the company gave commissions to its insurance agents as per regulatory requirements."

"The import of raw materials in the pharmaceuticals sector increased during the Covid-19 pandemic. As a result, the marine insurance business of the company increased," he stated.

"Besides, the management expenses and claims of the company reduced during the period, resulting in the increase in net profit," he added.

The principal activities of United Insurance are to offer general insurance including fire insurance, marine insurance (hull and cargo), motor insurance, and miscellaneous insurance. Revenue under these activities is derived primarily from the insurance premium.

During January to September this year, the company's gross premium was Tk32.16 crore, which was Tk34.94 crore in the same period of the previous year.

Its net premium was Tk22.27 crore, which was Tk24.55 crore in the same period of the previous year.

Its net asset value per share was Tk34.29 as of 30 September 2020.

During July to September 2020, the company's net profit was Tk4.74 crore, which was negative Tk0.42 crore in the same period of the previous year. Its EPS was Tk1.07, up from negative Tk0.10 in the same period of the previous year.

Previously, in March this year, the Insurance Development and Regulatory Authority (Idra) directed non-life insurance companies to stop giving illegal commissions to their agents.

It was alleged that companies provide 50-65% commission to their agents to increase business, but do not make reinsurance of policyholders. As a result, they cannot meet the claims of insurers.

United Insurance Company Ltd was listed on the DSE in 1990.

Its board of directors recommended an 11% cash dividend to its shareholders for the year that ended on 31 December 2019. At that time, its EPS was Tk1.95 and net asset value per share was Tk31.87.

Sponsors and directors jointly hold 42.94% of shares of the company, while institutions and general investors own 36.71% and 20.35%, respectively.

The last trading price of the company's shares at the DSE was Tk54.40 per share on Wednesday.