Janashakthi Life No. 01 in First Year Regular Premium growth recording 104%
Reinforcing the Company’s growth streak and agility, Janashakthi Insurance PLC recorded a growth of 104% in First Year Regular Premium with 42% growth in Gross Written Premium as per IASL reported industry figures for the third quarter reaching a total income LKR 5.2 Bn for the period under review, the financial year 2021. The Company posted a profit before tax of LKR 456 Mn for the same period, and an investment income of LKR 1.4 Bn for the period. Moreover, net claims and benefits to policyholders during this period recorded LKR 1.5 Bn.
“Once again, we have succeeded in achieving commendable financial success while also honouring our obligations to policyholders and all other stakeholders. We have strongly illustrated our inherent capability to achieve excellence and meet the various requirements and expectations of our stakeholders. We will continue to reinforce our robust position as a strong, trusted entity in the insurance industry,” commented Anil Tittawella, Chairman of Janashakthi Insurance PLC.
“The year 2021 has been a great year for Janashakthi Life notwithstanding the challenging economic environment and the ongoing pandemic. We witnessed an exponential growth momentum where the Company outperformed the industry in key parameters in the Life Insurance sector. In comparison to the industry, we have recorded a threefold growth in First Year Regular Premiums to record the number one position in business growth with 104%. Gross Written Premium also grew tremendously recording a two-fold growth in comparison to the industry recording 42% against a growth of 20% of the industry. A consistent market sensitive approach towards products and market segments contributed to this growth further establishing our position as a trusted insurer to provide all life insurance needs,” said Ravi Liyanage, Director/ Chief Executive Officer of Janashakthi Insurance PLC.
“Our sales force with their personal touch and empathy towards our policyholders continued to serve our communities with professionalism while assessing and providing customized investment and protection solutions. The professionalism of the sales force together with this great growth momentum led the Company to deliver ground breaking achievements reaching international standards of salesmanship and service excellence. This has resulted in 75 of our sales personnel qualifying for the internationally reputed Million Dollar Round Table by the end of quarter three. Also, consolidating our position in the New Business domain of the Life insurance market, Janashakthi Life has moved up two market positions,” he further added.
A pioneering Life insurer, Janashakthi Life realigned its business focus solely on Life Insurance in 2018 with the strategic aim of pursuing viable growth. Proving the wisdom of this strategic decision the Company has been able to outperform the industry on many fronts amidst the pandemic and tough economic climate. This incredible growth momentum reflects the strong work ethic and efforts to deliver the true value of an essential service ahead of its industry peers irrespective of challenges faced. This achievement reinforces the organization’s professionalism and commitment and is testament to the hard work and commitment of the team to ensure that they continue to honour the trust of their loyal policyholders.
Over a span of 27 years, Janashakthi Life has continued to revolutionize the insurance industry and journeyed forward to become a force to reckon with delivering a service beyond Insurance to all its customers and stakeholders while remaining true to its purpose of uplifting lives and empowering dreams. Janashakthi Life has continued to gain and nurture the confidence of customers across Sri Lanka with ethical and transparent conduct in all business affairs along with exceptional focus on customer service. To facilitate seamless continuation of life policies and enhanced accessibility the company has introduced multiple ways of paying premiums through online platforms and bank transfers. The online payment portal is geared to facilitate multiple online transactions and has increasingly gaining momentum due to its accessibility and convenience.
Additionally, Janashakthi Life has launched several innovative insurance solutions and pathbreaking products including Life Unlimited which provides lifelong hospitalization, Janashakthi COVID Guard – a world’s first in providing financial protection from COVID-19 amongst other products. Janashakthi Life offers a range of Life Insurance solutions and services that cater to different stages of the life cycle of an individual from childhood to retirement including educational needs, savings and investments, health requirements and mortgage protection. Thereby ensuring that the policyholders enjoy a wholesome life with solutions that support their goals and lifestyles through every stage of life.
Arpico Insurance PLC continues its growth in Q1 2023
Arpico Insurance PLC, one of the most innovative and trusted Life Insurance providers in the country and fully owned subsidiary of the blue-chip conglomerate Richard Pieris & Company PLC, reported a 19.5% growth in Gross Written Premium (GWP) in Q1 of 2023, exhibiting the fifth highest growth in the life insurance industry.
The Group Life business recorded the highest GWP in the company’s history, with over Rs. 226 million, also registering the life insurance industry’s second highest business volume in the reporting quarter.
The rider benefits, which are add-ons and an additional level of protection a policyholder can enjoy along with the main life insurance policy, made a remarkable leap with the company’s rider attachment ratio increasing to over 50%. This momentum that focuses on providing protection was helped by a continuous drive towards attaining an ideal of ‘Insurance for the Living’.
‘We are delighted to have outperformed the life insurance industry despite the various challenges that the country has experienced during recent times and we are continuing our growth trajectory in all aspects of our business. We are very optimistic on the promising outlook of the company and are taking steps to revitalize our strategic priorities in each of the domains,’ said Dr. Kelum Senanayake, CEO and Principal Officer of Arpico Insurance PLC.
Sharing similar sentiments, Pramoda Karunathilake, General Manager – Strategic Planning and Partnerships, said ‘We are looking at improved performance across our key metrics and have especially taken tremendous effort to grow and develop our Group Life insurance business. We have ambitious plans for each of our segments, driven by our cutting-edge processes and exceptional levels of customer care. We are also proud to have produced one of the first COT members of this year, within the industry’.
Sri Lanka Insurance posts a record profit of Rs. 12.47 billion before taxation for the year 2022
The nation’s insurer, Sri Lanka Insurance yet again recorded a stellar performance in the year 2022 to record a profit before taxation of Rs. 12.47 billion for the year 2022, with a combined Gross Written Premium (GWP) of Rs. 41.2 billion.Despite the adverse economic and social conditions that prevailed in the country in the year 2022, Sri Lanka Insurance was able to increase the asset base to Rs.274 billion and the Life fund to Rs. 156.7 billion to uphold the position as the largest and strongest insurer in the country.
Further although placed on a negative watch as all other local insurers due to the current economic situation of the country, Sri Lanka Insurance managed to retain A (lka) Fitch rating for insurer financial strength. SLIC is the only insurer to be certified with an A (lka) rating.
In the year 2022, Sri Lanka Insurance recorded a Life Insurance premium volume of Rs. 20.9 billion. Surpassing its own record, the company declared a staggering sum of Rs. 10.49 billion as Life Insurance bonus to its policyholders. Since 2006 SLIC has triumphed in declaring the highest Life Insurance bonuses year on year in the industry cumulating to a massive Rs. 92.8 billion making the SLIC bonus payout unmatchable.
Sri Lanka insurance Motor Plus the flagship brand emerged Market No 1 again enhancing the lead by Rs. 1.9 billion, recording a total volume of Rs. 12.78 billion premium value securing a market share of 19.6%. The category recorded a 9.5% growth above the industry growth which recorded at 7.3%.
SLIC also introduced many firsts to the Insurance industry in terms of Insurance solutions. Motor Plus Pinnacle the premium motor insurance product, Drive 60 a personal accident cover for senior citizens and JanaRakuma a personal accident cover affordable for all. SLIC also introduced Medi 60 the first and only medical cover for the senior citizens of the country and School Fee Protect the only insurance policy that provides protection for your child’s school fees for the entire school period.
Understanding the modern consumer SLIC has been taking the lead and making steady progress in transforming its operational architecture and front end customer interfaces to ensure increased digital integration to ensure extreme customer convenience. Claim settlement process has been re-engineered to facilitate fast-track and contactless claim settlements to customers.
SLIC also accelerated the digital strategy to systematically automate the systems and processes with the ultimate aim of migrating to a paperless environment at all levels of the business. The “Work Flow Management System” is transforming all internal manual and paper-based operations into digital-driven systemized operations. Payments processes are also transforming towards more digital and paperless procedures to enhance efficiency as well as to reduce cost components. SLIC also ushered in a performance driven culture with assigned KPIs at all levels.
Commenting on the achievements CEO of Sri Lanka Insurance Chandana L. Aluthgama stated – Amidst very challenging market conditions and ever evolving consumer patterns we have been able to demonstrate our resilience and prudent strategic practices to record a phenomenal financial result for the year 2022. We were able to accelerate our strategic initiatives to enhance digital integration and deliver exceptional service levels to our stakeholders and instill a performance driven culture linking rewards accordingly to introduce a variable pay instead of the traditional year on year fix increment. Looking at the future ahead we are geared now with increased internal efficiencies and productivity improvements to face the fast evolving insurance landscape. The success is also an embodiment of the commitment and agility of our staff and field force to an ever evolving insurance market.
Commenting on the financial success SLIC Chairman President’s Counsel Mr. Ronald C. Perera, commented “During unprecedented challenging times SLIC has been able record robust performance retaliating yet again the financial & operational prowess of the company, I thank the board, management and staff of SLIC for their efforts in achieving this remarkable performance”
Sampath Bank maintains a strong value proposition to all its stakeholders amidst ongoing economic challenges
Sampath Bank continued to reinforce its commitment to all stakeholders notwithstanding the ongoing economic challenges. Stepping in to support the customers affected by the prolonged economic downturn, the Bank continued to offer tailormade options and alternative repayment plans to help its customers sustain their businesses while staying true to its ethos of customer value creation. Similarly, the interests of another stakeholder group of the Bank, the shareholders, were kept in mind by paying the industry’s highest cash dividend of Rs 3.45 per share and a further Rs 1.15 per share in the form of scrip dividend.
The Bank also continues to honor its commitments towards the community via the “Weweta Jeewayak” tank restoration initiative as well as the Oceanic Ecosystem Restoration initiative titled “A Breath to the Ocean” which includes coral restoration, mangrove planting, and turtle conservation programs. The Bank continues to honour its commitment towards the community by focusing on environmental sustainability and towards that end completed the restoration of the Halgahawala forest reserve which it will continue to support even after the project’s conclusion.
The Bank succeeded in raising Rs 10 Bn in Tier 2 capital via a debenture issue in February 2023. Despite the depressing economic outlook in the Country, the issue was oversubscribed – a testament to the investor confidence placed in Sampath Bank and widespread acceptance of the stability and prudent governance of the Bank. The newly obtained capital will enable the Bank to rise above and prevail as one of the Country’s pre-eminent Bank.
Sampath Bank registered a profit before tax (PBT) of Rs 4.5 Bn and a profit after tax (PAT) of Rs 2.6 Bn for the three months ended 31st March 2023, indicating a decline of 30.5% and 44.3% respectively from the figures reported in 1Q 2022. This decline was mainly attributed to the exchange losses recorded during the quarter as a result of the appreciation of LKR by Rs 39 against the USD on its foreign currency reserves. All other income lines recorded performance well above the previous period.
Key highlights of financial results declared by Sampath Bank and the Group for 1Q 2023 compared to 1Q 2022:
* Strong NII buttressed by the higher AWPLR.
* 19% increase in net fee and commission income driven by trade-related operations
* As a result of the appreciation of LKR against USD by Rs 39 in 1Q 2023 vs depreciation of Rs 93.75 in 1Q 2022, the exchange income declined by Rs 10.9 Bn.
* 27% increase in impairment provision on loans and advances.
* The high inflationary conditions resulting in 22% increase in operational expenses.
* The upward revision in Income Tax rate and the introduction of SSCL resulting in higher tax expenses.
* Group’s PBT and PAT for 1Q 2023 was Rs 5 Bn and Rs 3 Bn respectively, reflecting a decline of 27% and 38% respectively.
Impairment charge on loans and advances: In the first quarter of 2023, the impairment charge for loans and advances increased by 27% compared to the same period in the previous year.
Impairment on Individually Significant Loan (ISL) Customers:
During the first quarter of 2023, the Bank evaluated a substantial portion of its loans and advances under the ISL category, taking into account both their financial strength and external macroeconomic pressures. Consequently, Rs 4.6 Bn was charged as impairment provisions against ISL customers in the first three months of 2023, an increase of Rs 1.3 Bn compared to the same period in 2022.
Even though a slow recovery was witnessed in some vulnerable industries, the Bank prudently maintained the previous level of impairment provisioning against ISL customers in these industries as it did not deem that the industry risk had significantly declined.
Collective Impairment: Impairment models used in 2022 were continued in 1Q 2023 to ensure adequate buffers were in place to absorb any potential credit risk that could arise in future. This cautious strategy was in response to the uncertain economic conditions witnessed both locally and globally. The Bank continued to maintain in 2023, the allowance for overlay which it applied in 2022. The probability weightage applied to the worst-case economic scenario remained unchanged during the reporting period.
During the period under review, the Bank also proceeded to reclassify customers from Stage 1 to Stage 2 considering their potential credit risk. Meanwhile customers operating in Risk Elevated Industries were also reclassified under Stage 2, with additional provisions recognized against them.
Impairment charge on other financial instruments:
The impairment charge on other financial instruments amounted to Rs 0.4 Bn for 1Q 2023, a 95% reduction compared to Rs 6.7 Bn reported in the corresponding period of the previous year. In 1Q 2022, the Bank recognised a substantial impairment charge against FCY denominated government securities in response to the downgrade of Sri Lanka’s sovereign rating in April 2022 and the announcement by the Government of Sri Lanka (GoSL) on the restructuring of the country’s external debt through an IMF-supported economic adjustment program. No such provisioning was deemed necessary in 1Q 2023 as substantial provisioning had already been recognized against the said instruments as at 31st December 2022.
Operating expenses in 1Q 2023 showed a 22% increase in comparison to the first quarter of 2022. The 41% increase in other expenses could be attributed to the prevailing inflationary conditions and other factors such as LKR depreciation, increased taxes and import restriction. Personnel costs too grew by 7.4% in 2023 mainly owing to annual salary increases.
Total effective tax rate of the Bank increased to 57% in 1Q 2023 from 42% reported in 1Q 2022, owing to the combined effect of the newly introduced Social Security Contribution Levy (SSCL) and the increase in income tax rate.
The Return on Average Shareholders’ Equity (after tax) decreased to 8.37% as at 31st March 2023 from 10.95% reported at the end of the year 2022. Return on Average Assets (before tax) stood at 1.38% as at 31st March 2023 as against the 1.16% reported as at 31st December 2022.
The Bank’s latest capital adequacy ratios improved further in 1Q 2023 from the figures reported in the previous quarter in addition to their being well above the regulatory minimum requirements. As at 31st March 2023, Sampath Bank’s CET 1, Tier 1 and total capital ratios were at 12.51%, 12.51% and 16.12% compared to 11.92%, 11.92% and 14.27% respectively at the end of 2022. These increases are attributed to two main reasons – Rs 10 Bn worth of Tier 2 capital infusion in February 2023 and decline in risk weighted assets resulting from the LKR appreciation.
Assets and Liabilities
Total assets of the Bank declined by Rs 18 Bn (by 1.4%) from Rs 1.32 Tn as at 31st December 2022 to Rs 1.31 Tn as at 31st March 2023. This decline was mainly the result of the Rupee value reduction in foreign currency denominated assets on the back of the LKR appreciation against the USD.
Similarly, the total Advances declined by Rs 22 Bn (by 2.4%) in the first three months of 2023 from Rs 920 Bn as at 31st December 2022 to Rs 898 Bn at the end of the reporting period due to the LKR appreciation against the USD.
Sampath Bank’s total deposit book declined from Rs 1.1 Tn reported at the end of 31st December 2022 to Rs 1.07 Tn at the end of 31st March 2023, a decline of Rs 32 Bn (by 2.9%). The CASA ratio at the end of 1Q 2023 was 32.8% compared to 32.7% reported at the end of 2022.
The Shareholders of Sampath Bank at the Annual General Meeting held on 30th March 2023 approved the final Cash Dividend of Rs 3.45 per share and Scrip Dividend of Rs 1.15 per share for the financial year 2022. In its 1Q 2023 Financial Statements, the Bank made a provision of Rs 5.3 Bn to facilitate the payment of the approved final dividend, while Rs 1.1 Bn was capitalized for the purpose of creating shares under scrip dividend. The Bank paid the dividend in April 2023.
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