The earnings of 88 per cent listed general insurers' soared year-on-year in the first nine months for January-September 2021 riding on a jump in return from investments in the capital market.
Industry insiders said the listed general insurance firms have been able to make a higher profit due to an increase in investment returns from the capital market and a reduction in operational costs.
Stocks of almost all non-life insurers have more than doubled while the benchmark index of the Dhaka Stock Exchange (DSE) rose 36 per cent in nine months for January-September 2021.
33 out of 38 general insurers listed on the Dhaka bourse published their un-audited financial statements as of Wednesday. Of them, 29 reported higher profit, with eleven firms posting over 50 per cent growth in EPS.
EPS of 29 general insurers rose between 2.0 per cent and 132 per cent while the EPS of four insurers declined slightly during the period under review, according to statistics available with the DSE.
EPS is the portion of a company's profit allocated to each share. In short, it serves as an indicator of a company's profitability.
Reduced operating costs under the directive of IDRA (Insurance Development and Regulatory Authority), which has also helped to surge the profitability of the insurance companies.
According to industry insiders, the insurance companies are trying to strictly follow a regulatory order within a 15 per cent commission for agents where many companies earlier offered as high as 60 per cent commission.
"Most of the companies in this sector are being able to reduce the management expenses, other costs, and claims amid the pandemic and thus, they are making more profits," said a merchant banker.
Among the companies, Agrani Insurance saw the biggest EPS surge, soaring 132 per cent year-on-year to Tk 1.37 for January-September, 2021.
The EPS of Provati Insurance also jumped 106 per cent to Tk 2.94 for January-September, 2021 compared to the same period a year earlier.
The EPS of Eastern Insurance also rose 88 per cent, followed by Bangladesh National Insurance with 85 per cent, Prime Insurance 84 per cent, City General Insurance 71 per cent, Green Delta Insurance 60 per cent, Pragati Insurance 59 per cent, Islami Insurance 58 per cent, Bangladesh General Insurance 57 per cent and Takaful Islami Insurance 53 per cent.
EPS of Express Insurance also jumped 45 per cent, Phoenix Insurance 41 per cent, Republic Insurance 32 per cent, Federal Insurance 31 per cent, Dhaka Insurance 30 per cent, Dhaka Insurance 29 per cent, Continental Insurance 29 per cent, Peoples Insurance 21 per cent and Standard Insurance 20 per cent.
Among others, Asia Pacific Insurance, Reliance Insurance, Desh General Insurance, United Insurance, Janata Insurance, Asia Insurance, Eastland Insurance, Paramount Insurance, Pioneer Insurance and Rupali Insurance also saw their EPS surge.
City General Insurance has informed that EPS has been increased due to realisation of gain from investment in shares and increase of premium income.
According to Standard Insurance, EPS rose due to an increase in operating income and other income.
"EPS rose due to higher underwriting profit, an increase of interest income and unrealised gain from share investment," said United Insurance.
On the other hand, EPS Crystal Insurance, Mercantile Insurance, Nitol Insurance and Northern General Insurance fell marginally by 17 per cent, 3.0 per cent, 2.30 per cent and 2.11 per cent respectively.
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