The non-life insurance sector depicted tremendous growth in 2006 as the combined profitability of the top 15 non-life insurance companies (having 88 percent share of the market capitalisation) stood at Rs 6.2 billion as compared to Rs 3.8 billion in 2005, with a growth of 65 percent.
The sector profits from the underwriting business surged by 14 percent, whereas, the major chunk in profitability was shared by investment income which soared by 66 percent to Rs 5.5 billion.
The net premium of the sector grew by 35 percent and reached Rs 15.3 billion in 2006 versus Rs 11.3 billion previously. However, this growth was not fully translated into the underwriting profits due to the higher claim ratio of 64 percent in 2006 as compared to 62 percent previously. Combined ratio (expense ratio + claim ratio) of the sector, on the other hand, stood at 83 percent which was due to lower expense ratio of 19 percent witnessed in 2006.
"While looking at the segment wise break-up of net premium we see that motor business contributed 54 percent in net premium of the sector followed by marine segment 18 percent, fire segment 17 percent and miscellaneous & treaty segments 11 percent", Haris Dagia, an analyst at JS Global Capital Limited said.
According to the figures available here earnings snapshot of key non-life insurance companies remained as diluted earning per share (EPS) of Adamjee Insurance grew by 36 percent in 2006, Askari Insurance 27 percent, Atlas Insurance 18 percent, Central Insurance 274 percent, Century Insurance 2 percent, EFU General Insurance 51 percent, East West Insurance -46 percent, Habib Insurance 306 percent, I.G.I Insurance 11 percent.