Great Eastern Holdings has reported profit attributable to shareholders of $158.7 million for the quarter ended 31 March 2011 (1Q11), an increase of 86% against 4Q10, but an 11% decline from 1Q10.
Net profit was underpinned by strong underwriting performance and broad-based year-on-year sales growth of 33% across markets. Long-term economic profitability, as measured by new business embedded value, grew 30% compared with the year before.
During the quarter, th group registered total weighted new sales of $176.5 million, a year-on- year increase of 33%.
Great Eastern says in Singapore, the successful marketing of regular premium products through the bancassurance channel contributed significantly to the strong sales expansion. In Malaysia, new sales for the group’s conventional business were spurred by the promotion of regular premium, investment-linked products by the agency force. In Indonesia, total weighted new sales posted a two-fold increase, reflecting the continued success of our initiatives to increase the size and productivity of the agency force.
The strong underwriting performance in the quarter compensated for the lower investment profit. Compared with early 2010, the investment climate during the quarter was weaker, as a combination of economic uncertainties in the developed economies, political turmoil in the Middle East, and the recent natural catastrophe in Japan together gave rise to credit concerns and a softer equity market. This led to unrealised mark-to-market losses in asset valuations, affecting investment performance. All in, profit from the roup’s insurance operations rose 3% to $155.7 million.
Profit from investments in shareholders’ fund came in lower at $25.6 million compared with 1Q10, as the fair values of held-for-trading investments remained relatively unchanged during the quarter. This stood in contrast to the larger fair value gains recognised for the same period last year, which had been driven by the recovery of the global financial markets.
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