Asian Alliance Insurance Co. Ltd.,
(AAICL) has recorded its best performance during the financial
year ended December 31, 2005.
AAICL posted a net profit
attributable to ordinary shareholders of Rs. 26 million. This
substantial increase in profit was powered by healthy top line
growth with Gross Written Premium (GWP) amounting to Rs. 932
million, up by 27 per sent. The company also managed its
expenses ‘well, another reason for improved profitability.
Despite the business expansion program and the inflation rate
of 11 per sent in 2005 AAICL expenses rose by only 15 per sent,
which reflect the efficient cost management practices.
"Healthy growth in business, process improvements and
efficiencies helped the company to record an exceptional
performance in 2005," AAICL Chief Executive Officer Ramal
Jasinghe said. Profit before tax at Rs. 28 million, is 32 times
higher than 2004.
AAICL’s net assets per share increased by 36 per sent over
the previous year. Considering the fact that management of funds
is a critical aspect of an insurance company, AAICL’s
investments in 2005 grew by 74 per sent to Rs. 564 million. "We
over performed the targeted benchmark yields set by the
Investment Committee," the CEO said.
AAICL has also maintained the solvency in its Life Insurance
in excess of the minimum margin as recommended by the
Consultant. The Company met the required solvency margin of
Non-Life insurance in accordance with the Solvency Margin rules
applicable in year 2007.
Commenting on the overall business growth, the CEO said in
2005, Life Division once again recorded a commendable growth of
37 per sent to achieve a gross Written Premium of Rs. 578
The Operating Surplus from Life Division was Rs. 195 million
compared with Rs. 77 million in 2004, reflecting a 153 per sent
growth. "This significant improvement in operating surplus was
possible due to the high retention rate of Life insurance
policies with the average policy value of Rs. 33,000/=, the
highest in the industry, and the reduction in expense ratio,"
the CEO said.
In 2004 AAICL succeeded to be ranked a competitive fifth in
the market with new business of Rs. 300 million. "The operating
efficiencies resulting from the high degree of professionalism
maintained in the sphere of sales, maintenance of
internationally accepted and sound standards of underwriting
combined with prudent financial management enabled the company
to transfer a Life surplus of Rs. 20 million to the shareholders
after providing for a reversionary bonus to the policyholders,"
the CEO said.
Despite intense competition in the market, the AAICL’s
Non-Life Division in 2005 recorded a 14 per sent growth in Gross
Written Premium over the previous year. Highest growth in GWP of
28 per sent was recorded in the Miscellaneous class followed
with 15 per sent growth in the Fire class. Although the net
claims increased by 11.5 per sent in year 2005, compared to
previous year the net claim ratio of 72 per sent was a slight
improvement against last year. "As a result of this and an
increase in reinsurance commission the Non-Life Division managed
to record a 41 per sent growth in underwriting results,
amounting to Rs. 71 million.
Non-Life business of AAICL also managed to curtail its
expenses despite a major reorganization that took place during
the year 2005. This resulted in a marginal increase in the net
expense ratio to 39 per sent.
AAICL, since its inception, has steadily made its mark in the
Sri Lankan insurance industry. It is backed by financially sound
and leaders in their respective fields - Asia Capital Ltd.,
Richard Peiris & Company Ltd. and Sampath Bank. This strong
support ensures that AAICL has the right expertise and reach to
propel itself to greater heights despite the highly competitive
insurance industry in Sri Lanka.