Friday Sep 20, 2024
Friday Sep 20, 2024
Thursday, 23 October 2014 00:00 - - {{hitsCtrl.values.hits}}
SLIC’s overall competitive position is deemed strong. The company has retained its market position as the second-largest insurer in terms of composite premiums. However, stiff competition from smaller players has been eroding the market share of the more established players, especially in the general insurance segment.
However, SLIC had maintained its competitive position in the general segment accounting for 24.04% of the market as at end-Dec 2013 (end-FY Dec 2012: 24.87%). Meanwhile, in the life segment it still controlled a creditable 19.54% of the market in fiscal 2013.
The company’s composite GWP grew 5.84% (or Rs. 1.18 billion) y-o-y to Rs. 21.35 billion during fiscal 2013, compared to a growth of 9.84% witnessed last year. The company’s premium growth was supported mainly by the life division which accounted for 39.33% of the company’s total premiums as at end-FY Dec 2013.
The life segment recorded a sturdy 13.96 % year-on-year growth during FY 2013, in comparison with a growth of 9.28% in the previous year. Meanwhile, the general segment which accounted for 60.67% of total GWP grew at a moderate 1.17%. The levelling of growth in the general segment is an industry-wide phenomenon driven by the slowdown in the vehicle market. Going forward however, GWP in the general segment is expected to grow at a stable rate in line with the growth in the vehicle market and the company’s focus towards other segments such as health insurance.
The life segment’s underwriting performance improved in 2013 owing to a stronger growth in GWP yet performance was tempered by a marginal increase in maturity claims. SLIC’s core underwriting performance recorded an improvement partly owing to a growth in GWP levels while claims - especially in the general segment - chartered a decline. The combined ratio in the general segment declined from 91.94% in FY Dec 2012 to 87.17% in FYE Dec 2013. Meanwhile, LRA notes that the company’s general insurance combined ratio was significantly lower than the industry average of 101.67% for fiscal 2013. On the other hand, SLIC’s overall expense ratio increased from 34.37% to 37.70% in fiscal 2013 owing to increases in management expenses.
The company’s total investment portfolio grew to Rs. 124.88 billion as at end-FY Dec 2013, up 10.18% from Rs. 113.35 billion as at end-FY Dec 2012. A significant portion of the company’s investment portfolio consisted of Government securities, with a share of 34.44% as at end-FY Dec 2013, while the corresponding percentage last year was 34.83%. Within the year in review, SLIC increased its fixed deposit and corporate securities portfolios while managing its equity portfolio prudently in order to improve investment yields.
SLIC’s capitalisation is deemed strong with indicators surpassing peers’ comfortably. The company’s shareholders’ funds were at Rs. 53.17 billion as at end-FY Dec 2013 increasing by 10.10% in fiscal 2013 (end-FY Dec 2012: Rs. 48.19 billion). The company’s ratio on shareholders’ funds to total assets continued to improve to 37.04% in fiscal 2013, up from 36.48% in FY Dec 2012.
Meanwhile, SLIC’s solvency ratios remained well above its peers for both divisions. The life segment’s solvency ratio and general segment’s solvency ratio amounted to 13.02 times and 4.34 times as at end-FY December 2013. (FYE Dec 2012: 10.14 times and 3.25 times). LRA notes that this figure was higher than the industry average of 8.86 in life and 2.61 in general insurance segments, indicative of the above average standards set by SLIC.
