Author Topic: UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD  (Read 807 times)

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Offline MZ

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UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD
« Reply #-1 on: March 04, 2014, 09:49:12 PM »
All about THE UNVIERSAL INSURANCE COMPANY LTD.

http://uic.com.pk/

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UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD
« Reply #-1 on: March 04, 2014, 09:49:12 PM »

Offline MZ

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Re: UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD
« on: March 04, 2014, 09:52:04 PM »
KNOW THE COMPANY: Armed with an asset base of Rs 854 million and total equity of Rs 75 million as of September 2013, Universal Insurance Company Limited (UICL) has been functioning in the insurance industry since 1960. UICL is part of Bibojee Group of Companies and was established by the renowned industrialist late Lieutenant General R. M. Habibullah Khan Khattak.

The re-insurers of the Company include: Hanover Reinsurance Company; Somitomo Marine and Fire Insurance Company; Korean Reinsurance Company; J.B Boda and Company (Broker). While the clientele includes: Textile/Spinning Mills; Flour Mills; Sports and Surgical Manufacturers; Garment Factories; Sugar Mills; Ghee Industries and various other industrial projects. UICL is providing insurance in six segments namely: Motor insurance; Marine insurance; Fire insurance; Miscellaneous insurance; Travel insurance and Claim settlement insurance.

CREDIT RATING--RAISES A RED FLAG!In 2011, the credit rating of Universal Insurance Company Limited (UICL) was downgraded to BBB (Triple B) from A-(Single A Minus), with a negative outlook. While subsequently in 2012, the rating was reaffirmed at BBB (Triple B) with negative outlook.

The rating reflects poor business performance of the UICL, primarily significant upsurge in operating expenses, constant decline in business volumes, deterioration in leverage indicators, and red flags on the dwindling loss absorption capacity as a result of considerable losses being reported since 2010.

9M CY13: The saga of losses continues!The performance of Universal Insurance during nine months of 2013 gives the impression that UICL is still struggling to survive in the sea of losses, where there appears to be no light of hope.

The underwriting results that somewhat improved in 9M CY12 could not sustain the momentum in 9M CY13 and regressed to the old days of underwriting losses. Net underwriting result posted a loss of Rs 15 million in 9M CY13 from an underwriting profit of Rs 2 million in the corresponding period of last year.

Drastic decline of 65 percent in other income from Rs 14 million in 9M CY12 led the loss spiral out of control where the loss after tax magnified significantly to Rs 77 million from Rs 47 million in the corresponding period of last year, reflecting a rise of 63 percent year on year. Resultantly, loss per share rose to Rs 2.57 from Rs 1.58 in the same period of last year. Not only the profitability saw a downfall during the period, but also the balance sheet position appears to be precarious. Total assets of the company declined to Rs 854 million as at September 2013 from Rs 912 million as at December 2012.

2012: Raw deal for the company! The profitability graph of UICL looks nothing more than a roller-coaster of ups and downs. And in 2012, the Company was once again seen waving a dead chicken. Gross Premium reduced by Rs 169 million. According to the Director's Report, downward revision of credit rating to BBB with negative outlook spelled troubles for UICL's performance during the year. Thus, UICL lost business to the tune of Rs 150 million as a result of loss of business from corporate clients.

Despite loss of business, net underwriting result saw a reversal and landed in green in 2012 to post an underwriting profit of Rs 1.4 million from an underwriting loss of Rs 2 million in 2011. Further to this, other income head surged by 79 percent to Rs 17.7 million, thus sugar-coating the bottom line to some extent.

After the credit rating was downgraded in September 2011 to negative outlook, the management, in order to improve its financial situation, knuckled down to curtail administrative expenses by retrenching large number of employees. Also, numerous branches were either closed down or merged with other branches to further rationalise expenditures. As a result, a marked improvement of Rs 25 million was witnessed in general and administrative expenses during the year.

But then again, there was no turnaround in UICL's fortune as bottom line was once again prompted to land in red as net loss after taxation shot up to Rs 66 million from Rs 64 million last year. This translated into a loss per share of Rs 2.21 vis-à-vis Rs 4.2 as witnessed in 2011.

FUTURE OUTLOOK The financial performance of UICL raises red flags for the survival of the Company down the road. That said the Company is in dire need to break-even from operations and for this, expenditures need to be cut down. Refining and re-engineering processes to avoid duplication of work and merging branches and regional business offices to rein in expenses can help management turnaround Company's fortune.

Although during 2012, initiatives taken by the management to curb expenses paid off to some extent but the situation turned worse again during nine months of 2013. Also, the risk profile of UICL appears to be dicey. In order to revamp the risk profile, the management ought to hunt for sources for external equity injection. But, still there appears to be some hope as UICL has set up a business development cell for attracting fresh business, which may bear its fruits in coming months. However, it's easier said than done considering the alarming financial performance of the Company.

=====================================================================
Universal Insurance Company
=====================================================================
Rs (thousand)                            2011        2012      9MCY13
=====================================================================
Net premium revenue                   292,305     210,671      82,442
Net claims                          (143,400)   (101,608)    (48,331)
Premium deficiency expenses           (1,242)       (892)       1,604
Expenses                            (110,343)    (82,248)    (40,584)
Net commission                       (39,343)    (24,484)    (10,528)
Underwriting result                   (2,023)       1,439    (15,397)
Investment income                       6,180       6,817       3,610
Rental income                           1,164       1,400       1,032
Other income                            9,933      17,762       4,944
General and administrative expense  (121,319)    (95,870)    (70,454)
Financial charge on lease liabilities   (348)       (450)       (370)
Share of profit of associates         (4,170)       3,230       2,941
Loss before taxation                (110,583)    (65,672)    (73,694)
Taxation                               45,775       (584)     (3,494)
Loss after taxation                  (64,808)    (66,256)    (77,188)
Loss per share (Rs)                      -4.2       -2.21       -2.57
=====================================================================

Offline MZ

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Re: UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD
« Reply #2 on: January 18, 2017, 11:18:44 PM »
~Just for Information~

Every share of UVIC has 0.028 shares of Gandhara Industries Ltd.

GHNI Current Rate 1,077

==>> 1077x0.028= 30.16

UVIC own market value is PKR 21/Share. less than market value of its GHNI Holding


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Re: UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD
« Reply #3 on: January 19, 2017, 12:43:05 PM »
~Just for Information~

Every share of UVIC has 0.028 shares of Gandhara Industries Ltd.

GHNI Current Rate 1,077

==>> 1077x0.028= 30.16

UVIC own market value is PKR 21/Share. less than market value of its GHNI Holding

do they hold any ghnl/gtyr ?
I hate waking up.

Offline sAr

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Re: UVIC -- THE UNVIERSAL INSURANCE COMPANY LTD
« Reply #4 on: January 19, 2017, 04:06:13 PM »
~Just for Information~

Every share of UVIC has 0.028 shares of Gandhara Industries Ltd.

GHNI Current Rate 1,077

==>> 1077x0.028= 30.16

UVIC own market value is PKR 21/Share. less than market value of its GHNI Holding

do they hold any ghnl/gtyr ?

Nopes.Few Bannu Woolen only

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