During the small history of a decade the enterprise has reached a mature stage of enhanced equity, improved claim management and better net/gross premium ratio.
The year under review also saw enhancement in dividend payout. During the last two years the company beneficiary of Bonanza in investment income.
However, improved earnings from core business, application of information technology, further penetration in the market will provided an enabling capability to be even better ranked among players of general insurance business. The company directors rejoiced that at the last year ended December 31, 2004, the company was ranked 4th in Pakistan on the basis of gross premium. They also pointed out that total portfolio became a lot more balanced than it was only a year ago.
Shaheen Insurance Company Limited was incorporated under the companies ordinance, 1984, as a public limited company in March 1995 and obtained certificate for commencement of business in July 1995. It was registered with the controller of insurance in November 1995 to carry out non-life insurance business comprising fire, marine, motor, aviation, engineering, transportation etc.
It is operating from its registered office and head office situated at 10th Floor, Shaheen Complex, M.R. Kayani Road Karachi. It has branch offices at Islamabad, Karachi, Lahore, Peshawar, Mirpur Azad Kashmir, Hyderabad, Faisalabad, Sialkot, and Multan. It can be seen that the company has its presence in Azad Kashmir and all provinces except for Balochistan. It has two branches in Karachi one at Abdullah Haroon Road and the other at Beaumont Road, Near PIDC.
According to the pattern of shareholding dated December 31, 2005, associated companies hold 33% of the company's total eight million shares of Rs 10 each. Insurance companies hold 31.7% general public own 4.8% and joint stock companies own 30.4% of the company's stock.
The company's shares are listed on Karachi, Lahore and Islamabad Stock Exchanges. During the last one year, the market value of its share has multiplied nearly six times from Rs 15.50 to Rs 92.50 per share. Currently the share is priced at Rs 90 per share which is nine times of the par value. The high price of the share has boosted its market capitalisation to Rs 720 million although it has relatively small capital base of Rs 80 million.
For the year under review the company has announced bonus stock dividend at 25% which will enhance its paid up capital to Rs 100 million next year. Since 1999, during the last seven years, the company announced annual dividend only in three years in 2002, 2003 and 2005. In 2002 and 2003, annual dividends were announced for cash payouts at 12.5% and 15% respectively.
During the year ended December 31, 2005, (FY 2005) the company underwrote gross premium at Rs 671.61 million registering 4.5% growth over preceding FY 2004 at Rs 641.64 million while the year 2005 gross premium figure was also record highest.
The net premium to gross premium ratio substantially increased at 78.6% from 58.7%. On the other hand net claim to net premium ratio dropped at 67% from 71.9% in the previous year. This clearly shows that increased business activity was managed with improved risk management. Hence claims remained on lower side despite enhanced under writing business.
The company earned record profits during the year under review. Its pretax and after tax profit of Rs 57.8 million and Rs 55.4 million respectively were the highest figures in the company's history.
The directors emphasized that the increase in profitability was mainly attributable to better claim management and increase in investment income.
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Performance Statistics (Million Rupees)
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December 31 2005 2004
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Share Capital-Paid-up: 80.00 80.00
Reserves & Surplus: 88.35 32.97
Shareholders Equity: 168.35 112.97
Provision for Outstanding
Claims (including IBNR): 98.82 118.38
Additional Provision for
Un-expired Risks (PDR): 1.41 1.00
Provision for Unearned Premium: 262.27 290.10
Commission Income Unearned: 8.59 13.33
Total Underwriting Provision: 371.09 422.18
Creditors & Accruals: 78.02 59.50
Borrowing: - 0.84
Other Liabilities: 8.87 13.17
Cash & Bank Deposits: 155.72 135.30
Loans to Employees: 0.74 0.58
Investments: 172.03 112.47
Investments Properties: 16.79 17.33
Other Assets: 259.06 316.07
Tangible Fixed Assets: 20.00 27.35
Intangible Assets: 2.00 0.19
Total Assets: 626.34 609.29
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Revenue Profit & Pay Out
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Net Premium Revenue:
From Fire & Property: 37.05 -
Marine, Aviation & Transport: 15.04 -
Motor: 453.82 -
Others: 21.19 -
Net (Aggregate) Premium: 527.10 376.76
(Net Claims): (353.15) (270.94)
(Premium Deficiency Expense): 0.41 1.00
(Net Underwriting Expenses): (119.24) (82.52)
Underwriting Result: 54.30 22.30
Investment Income: 44.64 20.74
Rental Income: 1.90 1.70
Other Income: 0.13 12.80
General & Administration Expenses: (43.12) (40.22)
Profit Before Taxation: 57.85 17.32
Profit After Taxation: 55.39 11.87
Dividend Bonus Stock (%): 25.00 -
Earning Per Share (Rs): 6.92 1.48
Share Price (Rs) on 29/06/06: 90.00 -
Gross Direct Premium: 670.61 641.64
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Financial Ratios
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Net Claims/Net Premium Ratio (%): 67.00 71.91
Price/Earning Ratio: 13.00 -
Book Value Per Share: 21.04 14.12
Net Profit/Gross Premium (%): 8.26 1.84
Price/Book Value Ratio: 4.28 -
Net Profit/Net Premium (%): 10.53 3.15
Net/Gross Premium Ratio (%): 78.60 58.72
R.O.E. (%): 32.90 10.50
R.O.A. (%): 8.84 1.95
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