HNB Assurance achieves 24% growth in turnover; GWP crosses Rs. 3 b mark

HNB Assurance PLC has posted a strong growth in turnover of 24% for the year ended 31 December 2011 generating a turnover of Rs. 3 billion as measured in terms of Gross Written Premium (GWP).

Its General Insurance Premium income grew by 27% to reach Rs. 1.71 billion while Life Insurance Premium income grew by 19% to record Rs. 1.29 billion. These growth rates are significantly higher than the rates achieved over the last two years indicating a significant acceleration in business growth.

The company was also able to achieve satisfactory rates of growth in profitability in spite of having to contend with an adverse investment climate. Its profit before tax grew by 11% to reach Rs. 300 million while the profit after tax increased by 14% to register Rs. 275 million. The company was able to offset the negative impact of a decline in Investment Income by improving its underwriting results from General Insurance.

“The most satisfying achievement in the year 2011 has been the significant reduction in the combined Ratio from 107% to 103% which was essential to maintain a growth in profitability in the midst of low interest rates and a sharply falling share market,” states HNB Assurance Managing Director Manjula de Silva.

This enabled the company to declare an attractive dividend of Rs. 2.10 per share on an increased base of 50 Million shares. The growth in dividend payment has been a phenomenal 56% which de Silva attributes to the company’s wish to offer a special reward to its share- holders at the end of its tenth year of operations.

Similarly, HNB Assurance’s life policyholders are also in line to receive a special tenth year reward in the form of a loyalty bonus. Accordingly all its life policyholders will receive an extra 50% of its annual bonus in respect of 2011 as recognition of their loyalty to the company.

The company increased its stated capital during the year to Rs. 1.17 billion well in excess of the minimum capital requirement proposed to be introduced by IBSL of Rs. 500 million per line of business. Its Insurer financial strength and national long term ratings were both affirmed at ‘A (lka)’ by Fitch Ratings Lanka Limited during 2011.