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Saturday, February 19, 2011

AAI growth story continues

Asian Alliance Insurance PLC recorded a significant growth in Profit before Tax amounting to Rs 370.5 million during the year 2010. The Life division contributed Rs 253.6 million and Non Life division contributed Rs 116.9 million for this outstanding performance. During the year in review, the Company reinforced the effectiveness of its sales distribution channels to record a Gross Written Premium (GWP) of Rs 1,673 million; a growth of 11% by fine-tuning its tailor made solutions in both Life and Non-Life segments. The exceptional growth in profits is a result of the Company optimizing operational and investment efficiencies in year 2010.

The profit of Rs 370.5 million has been arrived subsequent to providing adequate reserves in both Life and Non Life business as per the recommendations of the respective actuaries. Further, in arriving at the profit, the company has allocated a reversionary bonus amounting to Rs 90.0 million to the Life Policyholders. The Earnings per share of AAI has increased to Rs 9.81, a 76% growth over last year, which serves as one of the key indicators of the company’s profitability. In arriving at the Earning per share the company has taken into consideration the impact of the Rights Issue carried out in December 2010.

The Life division recorded a growth of its top line, which is Rs. 1,242 million by achieving a growth of 35% in ANBP, whilst continuing to improve the retention rate, which is the highest in the industry and the best achievement since the inception of the Company. The focus on the Non Life segment of the Company was on building a high quality insurance portfolio by taking a rational approach towards underwriting at the expense of a decline in market share. Additionally the reduction of premiums for the terrorism cover in year 2010 had a negative impact on the Non Life Gross Written Premium.

The company earned an investment income of Rs 692.6 million; the highest ever investment income recorded to date at AAI. Prudent investment decisions were taken, within the IBSL (Insurance Board of Sri Lanka) guidelines. The Management of equity portfolios of both Life and Non Life funds were under the purview of Asia Securities (Pvt) Ltd.

The above results have propelled the company to a solvency in both Life and Non Life divisions well above the required margin.

RAM Ratings Lanka upgraded the company’s claims-paying ability rating, from BB+ to BBB- ,reinforcing a stable outlook. The upgrade follows the successful completion of the Company’s Rights Issue.

AAI invested Rs. 25 million in Oracle Financial E-Business Suite, in the year 2010, which is integrated with two homegrown front end operational systems. Focusing on the immediate future, the IT infrastructure will enable the company to increase the efficiency of the business process and lower the expense ratio, as well as to enable the Company to reap the benefits of the changes and demands of the local insurance market.

source - www.dailymirror.lk