Comeback of Jubilee General Insurance
Recall that 2012 was a rather charm less year for the Jubilee General Insurance whose underwriting results largely remained flat and bottom line posted a miserable growth.
However, 2013 proved to be a comeback year for the Company. An improvement in core business shifted Company’s grounds. And the underwriting results portrayed a sizeable improvement on year-on-year basis after remaining grim for quite many years.
Talking about the core business, aggregate underwriting result surged by 45 percent in CY13 as the Company booked an underwriting profit of Rs223 million.
In this regard, delving into the segmental results will perhaps assist in analysing the segment-wise performance. Fire and property segment, which makes up 25 percent of the total portfolio, remained the key culprit in 2013, for it booked an underwriting loss of Rs111 million compared to a profit of Rs2 million in CY12.
Marine, aviation and transport segment, which constitutes 9 percent of the total portfolio, seems to have absorbed the impact of decline in the value of imports as well as the land transit issues with NATO supplies through Pakistan into Afghanistan. It showed in a 5 percent year-on-year decline in underwriting profit to Rs59 million in CY13.
The sizeable growth in underwriting profit was actually led by motor segment, which remained the frontrunner in CY13. Contributing 14 percent to the portfolio, the segment posted a phenomenal increase of 239 percent and booked an underwriting profit of Rs115 million.
By the same token, liability segment posted an underwriting profit of Rs45 million, up 23 percent year on year, owing to improvement in oil and gas exploration activity in the country.
The Company seems to be struggling with the losses of accident and health segment that constitutes 13 percent of the portfolio. However, improvement in losses was seen during the year as underwriting loss, which stood at Rs68 million in CY12, dropped down to Rs49 million in CY13, reflecting the Company’s ability to curb losses and bring this segment into profitability.
Finally, the miscellaneous segment, making up the highest contribution of 31 percent to the portfolio, depicted handsome improvement. It increased by 89 percent on a year-on-year basis to clock in at Rs163 million during the year.
Not only that the underwriting results stayed in good health during the year, the investment income, rental income, return on bank deposits and other income all had their share in cheering up the bottom line.
According to the latest statistics shared by the Insurance Association of Pakistan, the Company enjoys a market share of 15 percent; the third largest in non-life insurance segment. That’s an improvement from the eight percent share it used to have in 2005.
In order to expand its investor-base and meet the challenges of a dynamic business environment, the Company has been working on developing e-based products to be able to tap retail and micro-insurance segments. This move has, however, comforted Jubilee General Insurance to a great extent to come through-–as substantiated by the upswing in profitability in CY13.
JUBILEE GENERAL INSURANCE
Rs (mn) 2012 2013 chg
Net premium revenue 3,085 3,526 14%
Net claims 1,910 2,155 13%
Expenses 734 837 14%
Net commission 286 311 8%
Underwriting result 154 223 45%
Investment Income 631 803 27%
Rental income 105 116 11%
Return on bank deposits 47 60 28%
Other income 10 11 16%
General and administrative expenses 34 45 30%
Share in profit of associate 33 50 51%
Profit before tax 946 1,220 29%
Taxation 120 175 46%
Profit after taxation 826 1,045 26%
EPS (Rs) 6.06 7.66
Source: KSE notice