Janashakthi Insurance PLC is reporting combined results for perhaps the last time as the Company recently entered to an agreement with Germany’s Allianz to sell 100% of its fully owned subsidiary Janashakthi General Insurance Limited.
This transaction will yield a capital gain in the hands of Janashakthi Insurance PLC and it is expected that the company would undertake a substantial share buyback as a means of transferring capital back into the hands of Shareholders. The transaction and the buyback of shares is subject to regulatory and shareholder approval and is expected to be completed in the first quarter of 2018.
Janashakthi Insurance PLC continued its growth with a steady 11% increase in consolidated Gross Written Premium (GWP) which amounted to Rs. 15.115 billion, for the year ended 31st December 2017. The Non-Life sector continued to lead this growth while the performance Life segment remained flat. The Non-Life division recorded a GWP of Rs. 12.212 billion, while the Life segment contributed Rs. 2.903 billion.
The ongoing restructuring effort of the Life business is reaching conclusion and is expected to bear fruit in the foreseeable future, Janashakthi said in a statement.
The investments managed by the Company reflected a substantial increase in investment income of 23% over the previous year from Rs. 1.958 billion to Rs. 2.409 billion. This was the major driver of Other Revenue which reached Rs. 3.159 billion – an increase of Rs. 235 million over the same period last year
Overhead expenses continued to be strictly controlled through prudent cost management resulting in a year on year growth of less than 1%.
However, Net Benefits & Claims paid out to customers grew by 9% to reach Rs. 7.317 million adversely affecting performance. The Non-Life segment accounted for 85% of the Benefits & Claims. Profitability during the nine months of the year was adversely affected due to the increase in fire & engineering claims as a consequence of the floods, the dengue epidemic which resulted in higher medical claims, as well as the low level of transfer of profits from the life insurance business to shareholders’ profits. “We are however pleased to report that the performance of the last quarter of 2017 has shown signs of recovery,” the company said.
During the period under review group assets stood at Rs. 36.848 billion, reflecting a growth of 15% while the investment portfolio grew by Rs. 3.937 million over the period under review to reach Rs. 25.523 billion.
The Net Asset Value (NAV) per share improved to Rs. 18.19 compared to Rs. 16.61 in December 2016.
The year 2018 will be a year of change resulting from the disposal of the Non-Life business. The first half will be a period of transition and change but these challenges come with promise. We are optimistic that the opportunities arising from a singular focus on life insurance business coupled with the opportunity of rebuilding an efficient distribution system will yield results in the future.
