Insurance: ATLAS INSURANCE LIMITED - (Formerly Muslim Insurance Company Limited) Year Ended December 31 2005
The company produced excellent EPS as it was the highest ever in its history. In the year ended December 31, 2004, the year under review, the company developed a state of the art Oracle based software.
In order to improve knowledge based decisions, the directors envisaged to have on line connectivity through web based system which will create enabling business environment to extend its outreach to its clients. The IT based business processes will also further strengthen the relationship with its reinsurers.
The company has excellent track record of profit distribution. During the last 10 years the company declared dividends in every year and during the last five years the profit distribution rates were exceptionally high. For the year under review the company announced dividend at 100% (cash dividend at 70% plus stock dividend at 30%).
The company has also posted its 1st Quarter 2006 financials on its website.
In this quarter gross premium at Rs 151.2 million and net premium at Rs 66.22 million and under writing profit at Rs 35 million showed increase by 43%, 69% and 60% respectively over same period last year (SPLY). Investment income increased to Rs 73.7 million (SPLY: Rs 17.9 million) net profit increase to Rs 95.1 million SPLY: Rs 26.4 million by 260%.
The name of Muslim Insurance Company Ltd was changed to Atlas Insurance Limited in the year 2006 because the company is a constituent member of an industrial and financial sector Group - Atlas Group.
Today Atlas has a diversified interest in engineering, financial services and trading. It comprises seven public limited companies out of which six are quoted on stock exchanges in Pakistan and four private limited companies.
Muslim Insurance Company Limited was established in 1934 by Dr Sir. Mohammad Iqbal and acquired by Atlas Group in 1980. It is a public limited company listed on Lahore and Karachi Stock Exchanges. The company is engaged in the general insurance business of fire and property, marine transport, motor, engineering and other miscellaneous business.
The company is operating from its head office at Bank Square Lahore has its presence in other Prime Commercial centres of the country through its two Zonal Offices in Lahore and Karachi. Atlas Insurance Ltd has branches in Lahore, Rawalpindi, Faisalabad, Sialkot, Sahiwal, Multan, Karachi, Hyderabad and Sukkur.
The company has re-insurance arrangements with world renowned insurers.
Pakistan Credit Rating Agency (Pacra) has assigned Insurance Financial Rating of A+ to the company.
The chairman of Atlas Group industrialist Yusuf H. Shirazi informed that the company has been successful in making reinsurance treaty arrangements for 2006 on improved terms and increased capacity with world renowned insurers. Some of them are Swiss Re of Switzerland, Hanover Re of Germany, Tokio Marine & Nishido Fire and Sampo of Japan.
The company is also one of the two Pakistani companies rated by the reputed credit rating agency A.M. Best Company of New Jersey USA who assigned a financial performance rating of 7 (above average) on a scale of 1-9.
During the year ended December 31, 2005, the company made impressive growth both in terms of gross and net premiums. In this year the company underwrote gross premium of Rs 523.60 million against Rs 315.60 million registering 65.9% growth over the preceding year 2004. The net premium increased to Rs 264.08 million against Rs 144.97 million of the last year showing robust growth of 82.2% over the preceding year's. Marine, aviation and Transport Divisions net premium at Rs 175.86 million was by far the largest component of its net premium comprising more than two third of total net premium.
After that motor insurance business generated net premium of Rs 70.15 million.
The underwriting profit of the company increased to Rs 152.18 million as compared to Rs 59.03 of the last year.
Profit before tax rose to Rs 304.70 million as against Rs 104.86 million registering 191% increase over preceding year's. The net profit after tax at Rs 254.09 million works out to Earning Per Share (EPS) of Rs 20.79 improving EPS by Rs 14.02 from EPS of Rs 6.77 in the preceding year. The 10 years earning profile show that until last year EPS was in single digit although mostly improving from previous year's. But the EPS of the year 2005, is in double digit and more than three times of the peak EPS of last nine years which is a remarkable feat.
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Performance Statistics (Million Rupees)
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December 31 2005 2004
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Share Capital-Paid-up: 122.19 101.82
Reserves & Profit: 248.59 100.40
Shareholders Equity: 370.78 202.22
Provision for Outstanding
Claims (including IBNR): 76.44 91.99
Provision for Unearned Premium: 131.95 90.25
Commission Income Unearned: 12.85 12.45
Total Underwriting Provisions: 221.24 194.69
Deferred Liabilities: 0.61 5.20
Creditors & Accruals: 159.94 80.64
Other Liabilities: 90.63 27.09
Cash & Bank Deposits: 185.88 17.71
Loans to Employee: 1.24 0.52
Investment: 280.03 219.54
Current Assets Other: 357.05 258.07
Tangible Fixed Assets: 15.63 14.00
Intangible Assets: 3.37 -
Total Assets: 843.20 509.84
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Revenue Profit & Pay Out
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Net Premium Revenue From
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Fire & Property: 14.11 -
Marine, Aviation & Transport: 175.86 -
Motor Act: 70.15 -
Misc: 3.96 -
Net (Aggregate) Premium: 264.08 144.97
(Net Claims): (64.45) (40.23)
(Expense): (90.86) (82.39)
Net Commission: 43.41 36.68
Underwriting Result: 152.18 59.03
Investment Income: 159.88 54.64
Rental Income: 0.82 0.76
Other Income: 5.86 1.81
General & Administration Expenses: (13.44) (10.41)
Financial Charges: (0.60) (0.97)
Profit Before Tax: 304.70 104.86
Profit After Tax: 254.09 82.70
Dividend Cash Per Share: 7.00 2.00
Dividend Bonus Stock Per Share: 3.00 2.0
Earning Per Share (Rs): 20.79 6.77
Share Price (Rs) on 22-06-06: 100.00 -
Gross Premiums: 523.60 315.60
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Financial Ratios
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Price/Earning Ratio (Times): 4.81 -
Book Value Per Share: 30.34 19.86
Net Claims/Net Premium (%): 24.4 27.7
Price/Book Value Ratio (Times): 4.81 -
Net Profit/Gross Premium (%): 48.53 26.20
Net Profit/Net Premium (%): 96.21 57.04
Net/Gross Premium Ratio (%): 50.43 45.64
R.O.E. (%): 68.53 40.89
R.O.A. (%): 30.13 16.22
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COMPANY INFORMATION: Chairman: Yusuf H. Shirazi; Chief Executive: Arshad P. Rana; Directors: Aamir H. Shirazi; Muhammad Faruque; Chief Financial Officer: Muhammad Zafar Riaz; Company Secretary: Pervaiz I Malik; Registered Office & Head Office: 3-Bank Square, Shahrah-e-Quaid-e-Azam Lahore; Web Address: www.atlasinsurance.com.pk; North Zone Office: Nawa-i-Waqt Building Fatima Jinnah Road Lahore; South Zone Office: Ground Floor, Federation House, Shahrah-e-Firdousi Clifton Karachi.
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