UAL emerging from 2002 slump in first quarter

Union Assurance Limited (UAL) is emerging from last year’s slump with a first quarter growth of 24.4% to Rs. 20.7 million in the quarter ended March 31, 2003, the company’s General Manager (Finance & Planning) Srilal Jayamaha said.

In its last published annual report, UAL Chairman Hari Selvanathan said that 2002 was "a disappointing one" with the company making an underwriting loss for the first time since 1989 in its general insurance business.

"Since the major part of your company’s profits is from general insurance, this resulted in the consolidated profit before taxation reducing from Rs. 179.4 million in year 2001 to Rs. 41.2 million in year 2002," he said in the last published annual report.

He explained that the main reasons for the underwriting loss were adverse claims and a significant increase in expenses arising from depreciation of capital expenditure on office and computer systems. Also, full provision where considered necessary had been made including Rs. 42.2 million for re-insurance recoverables.

Discussing the first quarter performance for the current financial year, UAL said that consolidated net income had grown to Rs. 20.7 million from Rs. 16.7 million a year earlier and its premium income from both life and general insurance had also increased 9.4% to Rs. 612.3 million.

Further, UAL’s total investment portfolio had grown to Rs. 2.64 billion at the end of the first quarter from Rs. 2.57 billion at the end of the last year.

"We are confident that, with the level playing field now prevailing we will be able to forge ahead and emerge even stronger. There is no doubt that the pace of business is now accelerating appreciably. UAL is well positioned to make best use of the opportunities ahead," the company’s CEO, Mr. H. A. Rehmanjee, said.

UAL said that during the current financial year it has set up its own centre in Kurunegala as the first of many such efforts of owning the buildings it occupies in the provinces.

The company is also in the process of setting up its own training and development centre at its head office in Colombo 3, with state-of-the-art equipment and training methods on par with international standards, UAL said.