Aviva NDB records Rs.692 mn net profit for 2011
Aviva NDB Insurance PLC’S net profit for the financial year 2011 rose 15 percent year-onyear to Rs.691.6 million with an earning per share of Rs.23.05, year end financial filed to the Colombo Stock Exchange showed.
Aviva NDB Insurance PLC'S net profit for the financial year 2011 rose 15 percent year-onyear to Rs.691.6 million with an earning per share of Rs.23.05, year end financial filed to the Colombo Stock Exchange showed.
While sales fell to Rs.12.8 billion in 2011 from Rs.15.1 billion in 2010, Gross Written Premium (GWP) remained flat at Rs.10.5 billion.
The notes attached to the 4Q11 interim report showed that GWP from General Insurance business fell to Rs.2.69 billion during the year from Rs.2.84 billion while Life business GWP rose marginally to Rs.7.86 billion from Rs.7.78 billion.
“Life Gross Written Premium grew marginally to LKR 7,865 million in a year that was dominated by challenge and change,” a statement issued by the Aviva NDB said.
“Significant improvement in the profitability of the combined composite business was recorded compared to the corresponding period in 2010, due to prudent investment strategies that helped mitigate the significant impact of a decrease in investment income from unrealized equity losses caused by a decline in the capital markets,” the statement further noted.
According to Aviva NDB, the improvement in the bottom line performance was a result of the focus on optimizing the expense base as well as stringent underwriting and re-pricing initiatives in General Insurance.
Meanwhile in its 2011 annual report that was released lately, NDB Aviva Managing Director Shah Rouf noted that there have been a number of regulatory changes and updates during 2011 that have or will have a considerable impact on the business operating model.
He said that the marking to market of assets while liabilities continue to be valued on a net premium valuation basis creates the possibility of a mismatch.
“We are engaging with the industry and the regulator to ensure a sustainable outcome, perhaps via the implementation of risk-based capital norms sooner rather than later,” Rouf said.
Regulations have been set for insurers to separate their Life and General insurance businesses by 2015, and according to Aviva NDB, the firm is engaging as an industry with the regulator to ensure a clear and smooth implementation of this change over the next couple of years.