SINGAPORE, Nov 4 — Insurance giant Great Eastern Holdings has posted a 9 per cent rise in third-quarter net profits to S$135.2 million (RM325 million) after bumper new business helped produce a sharp rise in gross premiums.
Turnover at Great Eastern was up 13 per cent to S$2.513 billion on the back of a 53 per cent surge in gross premiums to S$2.136 billion, year-on-year.
Premiums from new life assurance business in both Singapore and Malaysia shot up 130 per cent to S$1.245 billion.
Overall, life assurance, which encompasses the participating fund, non-participating fund and the investment-linked fund sectors, saw a healthy overall jump of 35 per cent in profits to S$144.9 million.
The Singapore non-participating fund sector posted a net profit of S$89.7 million in the third quarter, which was more than double that of the previous year's profit of S$42.9 million.
This was due to lower interest rates, resulting in mark-to-market gains in debt investments in the portfolio, and decreased long-term insurance contract liabilities following an increase in the applicable interest rate used to discount these liabilities.
The participating fund sector posted an increase in third-quarter net profit of 10 per cent to S$25.5 million, while the last sector, comprising the investment-linked fund, saw profits going down 16 per cent from S$19.2 million to S$16.2 million.
Tan Beng Lee, group chief executive of Great Eastern, said: “The capital adequacy for all our insurance funds remains strong. Stress tests have demonstrated the funds' ability to withstand further deterioration in the financial markets, in the near to medium term.
“Management is closely monitoring the various risks within the portfolios and will implement risk mitigation measures as needed.”
The outlook for the year remains weak, as the group expects its overall performance to continue to be affected by local, regional and global economic conditions.
The continued volatility in equity and debt markets is also expected to hurt insurance earnings.
Great Eastern said that “as the group's liquidity is strong, management would continue to rebalance its portfolios, adjust its product offerings and assess carefully business and investment opportunities”.
Earnings per share as at Sept 30 was 41 cents, a dive of 52 per cent from 85 cents over the same period last year. Net asset value was S$6.31 as at Sept 30 compared to S$6.94 at Dec 31 last year.
Great Eastern's shares rose 3 cents to close at S$9.18 yesterday. — The Straits Times
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