Asian Alliance Insurance records 152% growth in profit before tax

Asian Alliance Insurance PLC recorded a significant growth in Profit before Tax amounting to Rs. 370.5 million during the year 2010. The Life division contributed Rs. 253.6 million and Non Life division contributed Rs. 116.9 million for this outstanding performance.

During the year in review, the Company reinforced the effectiveness of its sales distribution channels to record a Gross Written Premium (GWP) of Rs. 1,673 million; a growth of 11% by fine-tuning its tailor made solutions in both Life and Non-Life segments. The exceptional growth in profits is a result of the Company optimising operational and investment efficiencies in year 2010.

The profit of Rs. 370.5 million has been arrived subsequent to providing adequate reserves in both Life and Non Life business as per the recommendations of the respective actuaries. Further, in arriving at the profit, the company has allocated a reversionary bonus amounting to Rs. 90.0 million to the Life Policyholders.

The Earnings per share of AAI has increased to Rs. 9.81, a 76% growth over last year, which serves as one of the key indicators of the company’s profitability. In arriving at the Earning per share the company has taken into consideration the impact of the Rights Issue carried out in December 2010.

The Life division recorded a growth of its top line, which is Rs. 1,242 million by achieving a growth of 35% in ANBP, whilst continuing to improve the retention rate, which is the highest in the industry and the best achievement since the inception of the Company.

The focus on the Non Life segment of the Company was on building a high quality insurance portfolio by taking a rational approach towards underwriting at the expense of a decline in market share. Additionally the reduction of premiums for the terrorism cover in year 2010 had a negative impact on the Non Life Gross Written Premium.

The company earned an investment income of Rs. 692.6 million; the highest ever investment income recorded to date at AAI. Prudent investment decisions were taken, within the IBSL (Insurance Board of Sri Lanka) guidelines. The Management of equity portfolios of both Life and Non Life funds were under the purview of Asia Securities (Pvt) Ltd.

The above results have propelled the company to a solvency in both Life and Non Life divisions well above the required margin.

RAM Ratings Lanka upgraded the company’s claims-paying ability rating, from BB+ to BBB-, reinforcing a stable outlook. The upgrade follows the successful completion of the Company’s Rights Issue.

AAI invested Rs. 25 million in Oracle Financial E-Business Suite in 2010, which is integrated with two home-grown front end operational systems. Focusing on the immediate future, the IT infrastructure will enable the company to increase the efficiency of the business process and lower the expense ratio, as well as to enable the Company to reap the benefits of the changes and demands of the local insurance market.

AAI opens new distribution office in Piliyandala

The newest addition to the Asian Alliance Insurance (AAI) regional distribution network was ceremoniously opened on 28 January. Situated at 78/1/1, Horana Road, Piliyandala, this latest addition will function as a divisional office, taking the number of branch offices up to 22.

Director/CEO of AAI Ramal Jasinghe graced the occasion as the chief guest. The Executive Committee members and senior management of the company were present at this ceremony; opening of another outstanding office that is geared to further strengthen the distribution arm of the company.

Zonal Manager – Kottawa Soma Hettiarachchi commenced the ceremonial opening with the welcome note. General Manager – Sales and Marketing Chula Hettiarachchi shared the strategy outlining this milestone, which is in fact aligned to the expansion of the company amidst the prevailing competitive landscape in the industry. Further, he shared the strategies of company’s expansion plan designed to provide protection from various risks to the community in Western Province.

Speaking at the inauguration of the new branch, Jasinghe emphasised that strengthening the company’s value system through strengthening the various skills possessed by its staff would act as the backbone of the winning trend of AAI, driving the company towards achieving its objectives. He further stressed that maintaining high standards of professionalism whilst honouring the fundamentals of insurance was of utmost importance.

The newest branch in Piliyandala is geared to service both Life and Non Life businesses, using its successful formula of ‘professionalism’. AAI has resourced this unit with experienced staff and state-of-the-art ICT, offering scientific and tailor made insurance solutions to the residents in Piliyandala.