Operating since 1953, Jubilee General (formerly known as New Jubilee Insurance Company Limited) is positioned as the second largest player (on the basis on premiums written) in the non-life insurance sector of Pakistan. The company is also listed on Karachi and Lahore Stock Exchanges. The company is backed by Aga Khan Fund for Economic Development and Hashoo Group. The company has a paid-up capital of Rs 1.56 billion and an asset base of Rs 14.96 billion.
Credit Rating The IFS (Insurers Financial Strength) rating of Jubilee General has been affirmed at 'AA+' with stable outlook by JCR-VIS and PACRA, thus reflecting the sound financial standing of the company.
Market Share In the private non-life insurance sector, nearly 70 percent of the industry share is held with top five insurers; namely EFU General, Jubilee General, Adamjee Insurance, IGI Insurance and United Insurance. Jubilee General captures a market share of 19 percent, thus ranking as the second largest private sector non-life insurer on the basis of premiums written, according to the latest statistics published by Insurance Association of Pakistan (IAP).
Investment Portfolio The investment managers of Jubilee General seem to have a soft spot for mutual funds and equities. In its investment portfolio, equities and mutual funds hold a combined share of 89 percent (as of December 2013). Mutual funds, alone, contribute nearly 65 percent in the investment portfolio of Jubilee General, of which mostly are money market funds. Besides, investment in risk-free government securities holds a small share of nine percent while the remaining one percent is invested in Term Finance Certificates (TFCs).
Insurance Portfolio Jubilee General provides a range of insurance services including fire and property, marine, aviation and transport, motor, liability, accident and health amongst others. Motor segment is the key segment in the insurance portfolio of the company, contributing the biggest share to the aggregate net premiums. During six months ended June 2014, motor segment contributed 25 percent to the aggregate net premiums, followed by accident and health (23 percent), fire and property damage (19 percent), marine, aviation and transport (16 percent), others (16 percent) and liability (one percent).
Financial Performance--1H CY14 During six months ended June 2014, the company continued its upward drive, with its bottom line boasting a decent growth of 11 percent year on year. Growing premiums and burgeoning investment income remained the primary drivers of boosting the bottom line growth during the period under review.
Net premiums surged by 10 percent year on year, while claims grew in tandem with growth in top line. Hence claims ratio (net claims to net premiums) stayed flat at 60 percent. However, underwriting profit slipped by 27 percent year on year as a result of soaring expenses. This is evident as the combined ratio, which takes into account claims, management expenses and commissions, shot up by 200 bps, thus clocking in at 95 percent.
Investment income, the crucial element of driving the bottom line growth, stayed in good shape, rising by 20 percent year on year during the aforementioned period. In 1H CY14, investment income framed 22 percent of top line (1H CY13: 20 percent). Healthy growth in dividend income and gain on sale of non-trading investment led to strong investment income during the period.
What's ahead? With the economy on the mend and regulatory changes taking place in the insurance industry, the insurers in Pakistan are stepping forward gradually. Moving into takaful window operations and micro-insurance segment has provided insurers with an avenue to expand their insurance portfolios, thus boosting their outreach rapidly.
Mind you, insurance industry in Pakistan has faced tough times in yesteryears as the industry stood at a stagnant position with little hope for betterment. The efforts put in by the regulator warrants a pat on its back for coming up with practical solutions to encounter the issues faced by insurers. One hopes that the insurers take these developments as an opportunity to radically transform the image of Pakistan's insurance industry; thus enabling it to stand at par with its regional counterparts.
Sound financial standing of Jubilee General along with sound market share will enable the company to worm in the evolving segments mainly Takaful and micro-insurance. Besides, harmonizing with the technology and development of alternative distribution channels will lay a heart start to tap the untapped segment of the market by providing easy and user friendly insurance services to its customers.
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Jubilee General Insurance
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Rs (mn) 2008 2009 2010 2011 2012 2013
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Gross premiums 3,526 4,031 4,285 5,180 6,008 6,569
Net premiums 2,186 2,298 2,451 2,764 3,085 3,526
Net claims 1,332 1,421 1,678 1,699 1,910 2,156
Underwriting results 108 114 -64 154 154 223
Investment income 366 674 587 748 783 979
Profit before tax -179 772 547 893 946 1,220
Profit after tax -267 656 450 797 827 1,045
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Source: Company accounts
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Key Performance Indicators
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2008 2009 2010 2011 2012 2013
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Claims ratio 61% 62% 68% 61% 62% 61%
Combined ratio 95% 95% 103% 94% 95% 94%
Investment ratio 17% 29% 24% 27% 25% 28%
Profit margin -12% 29% 18% 29% 27% 30%
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Source: Company accounts
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