Jubilee Life

Jubilee Life Insurance has a long history of not failing to cheer its stakeholders. Double-digit profitability growth year after year has become more like a norm for this company. The result for the half year ended June 2014 buttressed the same sentiment with the company flattering a double-digit profitability growth of 51 percent year on year.
Jubilee is not one of those insurance companies in Pakistan that bank solely on their investment incomes. Rather it tries to grow its insurance portfolio and earn sufficient premiums. During the half year ended June 2014, net premiums surged by 33 percent year on year on the back of steady growth in premiums of individual life unit linked business. If CY13 numbers are any guide, individual life unit linked business holds the highest share of nearly 86 percent in the gross premiums mix of the company while the rest is shared between conventional and accident and health business.
Further, income from the highly-favourable investment portfolio buttressed the bottom line growth. This is likely to have come on the back of sturdy gains from high yielding government securities. As of 2013, the company's investment portfolio was tilted towards government securities, with a share of 76 percent in the investment mix.
As for the core business of Jubilee Life, the quality of the insurance portfolio is getting better. This is reflected in the improving claims ratio of the company. During the half year ended June 2014, net premiums to net claims ratio of the company witnessed an improvement of 100bps. Resultantly, surplus available in revenue account posted a flattering increase of 65 percent year on year.
Looking ahead, the allowance of takaful window has opened doors for the company to further boost its premiums by targeting the Islamic insurance niche.

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Jubilee Insurance - Financial Highlights

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Rs (mn)                                1HFY13    1HFY14     chng

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Revenue

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Premium revenues net of reinsurance     7,595    10,098      33%

Investment income and other income      1,616     2,054      27%

                                        9,211    12,152      32%

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Expenses

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Claims net of reinsurance including     6,230     8,142      31%

movement in policy holder liability

Management expenses                     2,369     2,999      27%

                                        8,599    11,141      30%

Surplus available in revenue account      612     1,011      65%

Surplus transferred to

 profit & loss account                    535       840      57%

Profit & loss account

 before appreciation                       52        41     -21%

 of surplus to shareholders fund

Profit before tax                         587       881      50%

Taxation                                (190)     (283)      49%

Profit after taxation                     397       598      51%

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EPS (Rs.)                                5.51      8.29

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