Monday, October 3, 2011

Ceylinco Insurance’s strong half-yearly performance indicates highly profitable 2011

Ceylinco Insurance PLC announced impressive half-yearly results for the period 1st January to 30th June 2011, achieving a Total Premium of Rs. 9.6 Billion, which marks a 12% growth over the same period last year. In this  exclusive interview, T. Nihal M. Peiris, Finance Director, Ceylinco Insurance, reflects on the company’s robust performance in the first half of 2011.

Q: What is your assessment of Ceylinco Insurance’s performance during the first half of 2011? 

A.  Ceylinco Insurance has recorded strident growth and profitability, strengthening its leadership status once again by becoming the market leader for the seventh consecutive time. Despite the fiercely competitive nature of the insurance industry, we have succeeded in outstripping competition on the basis of customer service and innovative products. Our strategic route to profitability has raked in handsome results for the company. Ceylinco Insurance General recorded a premium of Rs. 4.9 Billion, which is a 7.3% growth over the corresponding period last year; while the Life division registered a figure of Rs. 4.7 Billion, which is a steep 18.6 % growth as compared to 2010. Overall, the company recorded an 11.6  % growth in revenue over the previous year.

Q: What would you consider as the key highlights of the period under review?

A: Ceylinco Insurance recorded a Profit Before Tax of Rs. 268 Million, marking a 120% growth over last year, while achieving a Profit After Tax of Rs. 204 Million, a 121% growth over the previous year. The company’s consolidated profit stands at Rs. 344 Million - a whopping 164% growth over the corresponding half-yearly mark in 2010. The company’s subsidiaries, which are engaged in mini hydro power generation also made a significant contribution to the bottom line by their splendid performance in the first two quarters of 2011. This performance is all the more commendable when you consider the fact that profitability of the Life division is not included in this consolidated profit statement, but taken into account only after actuarial valuation which takes place at the end of the year. Keeping this in mind, we anticipate the year-end total profitability to be substantially higher.

Q: In your opinion what are the key factors that contributed to these impressive  results?

A: Ceylinco Insurance measures its  success not by revenue alone, but also by its performance in delivering value addition to its loyal customer base. Significantly, we have paid claims of Rs. 3.7 Billion, an increase of 12% over last year. In our pioneering fashion, we continue to be the only company to pay all General insurance claims ‘on the spot’. To enhance customer convenience further, we have devised payments via mobile phones and ATM cards as well, in response to customer needs.

Q:  What about growth in assets and other investments undertaken by Ceylinco Insurance this year?

A:  Company’s total asset base expanded by 6% over last year to reach Rs. 52 Billion in 2011. This growth has been fuelled by investment growth, acquisition of properties and branch expansion activities during the first half of the year. Meanwhile, the Ceylinco Insurance Life fund swelled to Rs. 35 Billion during the period. We expect to enhance our branch network further during the year, with a greater focus on the north and east.  

Q: Do you perceive a difference in Life insurance market penetration in the post-war context?

A: Market penetration in  insurance poses great challenges and growth has been a difficult proposition in the past. However, Ceylinco Insurance has been making steady gains in expanding its reach, and in our experience, our focus on society and customers’ needs have placed us in a dominant position with our customers who are demonstrating greater  loyalty towards the brand. Strategic marketing, focused sales initiatives, public awareness campaigns and innovative products were the chief contributory factors to this steady upward trend which has resulted in greater penetration of the market. Furthermore, this expansion has brought its network up to 197 main branches and 70 sales counters for General insurance, and 185 life centres for Life insurance.

Q:  How has the company added value to its shareholders?

A: Enhancing shareholder wealth has been a key objective of the company, and as testimony to this commitment, the total shareholder fund ballooned to Rs. 6 Billion during the same period, which reflects our unerring focus on ensuring shareholder wellbeing.  In 2011, prices of voting shares increased to Rs. 950/- per share, while Non-Voting share rates stood in the Rs. 360/- at one point during this period. This strong showing of our stocks was commendable against the backdrop of other insurance stocks which have been on the decline. This reflects the faith and confidence our customers and shareholders have placed in us. The strong performance of Ceylinco Insurance brought about an upsurge in our shares to touch a market capitalisation at Rs. 14 Billion. In 2010, Ceylinco Insurance offered the highest dividend payout to its shareholders at Rs. 5.50 per share, equalling dividends paid only by leading banks. We anticipate the year 2011 to be even more profitable for our shareholders. Going by the current financial performance in the first six months alone, we are confident of announcing attractive dividend amounts at the year ending. We are committed to the well-being of our stake holders and will engage in initiatives that would benefit them.   

Q:  What are your commitments towards good governance and transparency?

A: The company places a great emphasis on governance and transparency, ensuring full compliance on all fronts. Its nerve centre ensures that all claims are verified and precise payments made. Independent valuation teams are hired to investigate any fraudulent claims. This meticulous attention to detail has given us a reputation for fair-play and thereby engendered a strong bond of confidence between our customers and the company. 

Q:  If you had to list the most vital components of the company’s success, what would they be?

A: Our sales force is our life blood – with over 1,200 general insurance staff and 5,000 Life insurance staff servicing customers islandwide. The company’s decision to work mainly through its professionally trained sales staff has reaped rich dividends. Our trained staff are able to assess needs of customers and offer customised policies that best suits their needs. Ceylinco Insurance has stayed away from competing on price points, preferring instead to compete on value added service and unique product solutions. This strategy has borne fruit and brought discerning customers to the safety of our care, a fact that is duly reflected in our bottom-line. Another key contributor to the company’s market leadership status is a sophisticated IT system which has speeded up accounting, fast-tracked payment procedures and streamlined operations to such an extent that staff are freed up to pursue new business and devise new marketing strategies in order to add value to the company. We have devised an aggressive growth strategy for the remaining period of 2011 in order to achieve year-end financial goals. wOverall, Ceylinco Insurance’s half-yearly performance reflects a robust financial year ahead for the company.

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1 comment:

top penny stock picks said...

Sounds really amazing, I know that There are huge investors of Ceylinco Insurance who got good interest over their investment. I am curious to invest in Ceylinco after financial month.
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