General insurers see growth driven by higher premium income, efficiency

General insurance companies, which could increase premium income and had invested in Treasury securities, secured profit growth in the first quarter through March this year.

Out of the 10 general insurers that recently declared their profits earned in January-March this year, six reported growth while the remaining four saw a decline.

The companies with earnings growth also showed better operating efficiency that helped them cut management expenses.

Rupali Insurance Company's net premium income grew 28 per cent to Tk 108 million in January-March this year, compared to the same period last year. That supported its profit growth of 28 per cent year-on-year to Tk 46 million in the first quarter this year.

On the other hand, Mercantile Islami Insurance failed to boost its net premium income and also witnessed a lower profit in Q1 this year compared to the first quarter of the previous year. The insurance company's net premium income in the first quarter to March stood at Tk 78.2 million, 12.8 per cent lower than in the same quarter last year.

Subsequently, the profit fell 6.4 per cent year-on-year to Tk 18.23 million in the first quarter this year.

Alongside growing their business, some insurers seem to have focused on efficiency in operations for survival in this competitive environment. They significantly slashed management costs.

For example, Mercantile Islami Insurance cut management costs by 24 per cent year-on-year to Tk 40.61 million in the January-March quarter of 2025. Cost cuts helped limit profit decline to 6.4 per cent. Otherwise, the quarterly profit would have gone down further.

On the contrary, City Insurance's net premium income growth was 44 per cent year-on-year in the Q1 this year but profit grew only 5.73 per cent year-on-year during the period because of the company's failure to keep management expenses in check.

The insurer's management cost surged by more than 25 per cent to Tk 71.33 million.

Another common factor behind profit growth in the quarter was an increase in investment income.

Insurance firms, which had scaled up investments in debt-based government securities, managed to gain a higher profit in the quarter to March this year, compared to the same period of 2024.

For example, Bangladesh National Insurance Company experienced a nearly 12 per cent year-on-year decline in premium income in Q1 this year but it still gained a commendable 31.36 per cent year-on-year profit growth, driven by a 132 per cent year-on-year increase in investment income in January-March this year, most of which came from Treasury securities.

farhan.fardaus@gmail.com