Corporate Results: Jubliee Life Insurance ranks in Rs.1.3 billion

KARACHI: The after-tax profit of Jubilee Life Insurance for 2014 rose to Rs.1.3 billion, which is 44.6% higher than its earnings in 2013, according to a notice sent to the Karachi Stock Exchange (KSE) on Wednesday.

The company’s earnings per share increased to Rs18.8 from Rs13 recorded in 2013. Jubilee Life also declared a final cash dividend of Rs7 per share, which is in addition to the interim dividend of Rs2.5 per share.

The absolute increase of Rs.420 million in the company’s profit appears to be on the back of higher premium revenue and investment income during 2014.

The increase in Jubilee Life’s premiums net of reinsurance was 29%. They rose to over Rs21 billion from Rs16.3 billion recorded at the end of 2013.

State Life Insurance Corporation is currently the largest player in the life insurance industry of Pakistan. According to the Securities and Exchange Commission of Pakistan (SECP), it had over 65% market share until 2011. The state-owned giant has yet to publish its financial accounts for 2012 and 2013.

In the private sector, however, Jubilee Life is a leader among all listed life insurance companies. Its gross written premiums amounted to Rs17 billion in 2013, resulting in the company’s market share among listed, private-sector insurance companies of about 48%.

Its closest rival within the private sector posted a profit of Rs951 million in 2014, which was 2.2% less than its earnings a year ago.

Jubilee Life’s investment income and other income in 2014 increased 70% on a year-on-year basis. The growth rate is substantially higher than the corresponding increase in the KSE-100 index, which went up about 27% over the same period.

With a rapid increase in business, the company’s claims net of reinsurance also increased to Rs18.7 billion, up 40.8% from the preceding year. Management expense went up 22.9% on a year-on-year basis to Rs6.1 billion.

Jubilee Life announced in October that it was formally launching Islamic insurance products through a window of Takaful business. It is likely to increase the company’s profitability substantially given that the current level of insurance penetration in Pakistan is only 0.9% of the country’s gross domestic product.