Remarkable growth in profits at HNB Assurance

HNB Assurance PLC has recorded remarkable growth rates of 275% and 371% in respect of Profit Before Tax and Profit After Tax respectively for the six months ended 30th June 2012.

Accordingly, it has reported a Profit Before Tax of Rs 109.5 Million and a Profit After Tax of Rs. 85 Million as per the interim financial statement released to the Colombo Stock Exchange. This was the first time that the Company submitted its accounts under Sri Lanka Financial Reporting Standards (SLFRS).

One of the key contributory factors to this excellent performance has been the improved underwriting profitability achieved in respect of its General Insurance business. This is reflected by the Company being able to record a combined Ratio of 100% through its unwavering commitment to maintaining professional underwriting standards. This was supplemented by a strong growth in Investment Income largely due to the enhanced fund base resulting from the rights issue carried out last year, higher interest rates and foreign exchange gains. The application of new accounting standards (SLFRS) also had a positive impact on the Company’s performance.

While improving its bottom line, the Company was also able to record a 13 % growth in its turnover as measured by the Gross Written Premium (GWP). Its Life Insurance GWP grew by 20% while the General Insurance GWP grew by 8%. This achievement is consistent with the Company’s desire to grow its life business at a faster rate while managing the growth in general business with the focus on profitability.

According to Manjula de Silva, Managing Director of HNB Assurance PLC, “the Management is pleased with the significant growth in profitability achieved in the midst of a highly competitive market environment. It is the culmination of a process that began several years ago to improve the underwriting profitability of the General Insurance business in anticipation of a possible slowdown in the growth of investment income. We were fortunate that we received a positive contribution from both underwriting and investments during the period under review”.