Janashakthi Insurance PLC (JIPLC) made a 17% growth in net profit-after-tax to Rs. 770 Mn and13% revenue growth to Rs. 6.8 billion in financial year 2010.
JIPLC Managing Director Prakash Schaffter said, “We will focus our sights on growing our top line in 2011, whilst ensuring that business written adds to the bottom line. Country’s current and projected growth rates portend significant expansion in the insurance sector. Janashakthi with its branch network and distribution strategy is poised to capitalise on this.
Company’s enhanced Management Information Systems and Data Warehouse System will give an edge to concentrate on the more profitable customer segments and to weed out less beneficial business. Expense control during the year under review gives us cause for satisfaction. This is a continuation of the virtually zero rate expenses growth in the previous two financial years. We are confident that we will be able to contain expense growth rates to single digit figures in 2011 as well. We also succeeded in curtailing staff headcount increase to almost zero level.
We will continue to look at the development of selected new policies in Life and General Insurance, after a comprehensive market study of customer needs and the identification of specific target segments. Our New Products Development process has been strengthened and various new products launched have proved to be innovative,” Schaffter added.
Janashakthi Insurance has the highest stated capital among quoted insurance companies amounting to over Rs.1.49 billion, over 7.5 times the statutory requirement. The company is also backed by an asset base of over Rs.11.8 billion, of which Rs. 4.7 billion is in Government Securities.
JIPLC Chairman W.T Ellawala said, “Janashakthi achieved a total gross Rs. 6.158 billion premium, an 8% increase over 2009. General Insurance business contribution was Rs. 4.5 billion and Life Insurance Rs. 1.68 billion.
A substantial part came from prudent and efficient investment portfolio management. We invested in a range of long and short-term instruments including gilt-edge securities and equity. Our investment committee took advantage of the bullish sentiment in the Colombo Stock Exchange in 2010. During the year we disposed of some of our strategic quoted equity investments, booking substantial profits that contributed significantly to the results.
Our strength was endorsed by RAM Ratings which upgraded our claims-paying ability rating to A- : outlook is stable. The rating upgrade was premised on our strong performance since the previous review, underpinned by our ability to improve our expense ratio and maintain a better claims ratio than most peers in the general segment.
Life business grew 18% over the previous year to Rs. 3.8 billion. The introduction of our new investment linked policies and availability of new business in the North and East contributed to this beneficial result.
General sector growth in 2010 fell below our expectations and failed to match the previous year’s 9% increase. Entry of several new players offering low premium rates albeit unviable and unsustainable in the longer term and strategic decision to discontinue certain accounts which had consistently proved to be unremunerative were the reasons.
Janashakthi’s Motor Insurance business’ star performer, the Full Option Policy-further reinforced by our innovative Motor Vehicle Emergency Policy-continued to be the popular choice, with 11% revenue growth, the highest among the three top insurers.
Company’s revenue grew 13% to Rs. 6.8 billion. Company’s total assets stood at Rs. 11.8 billion. The Company paid claims amounting to Rs. 3.1Bn, 13% higher than 2009.
“2011 ushers in a time of renewed hope and encouragement,” the Chairman concluded.
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