Global Insurance gains 14pc higher income on increased return from govt securities

Global Insurance secured a 14 per cent year-on-year growth in profit to Tk 64 million in 2024, supported by higher investment income in a challenging business climate.

Subsequently, the general insurer's consolidated earnings per share (EPS) stood at Tk 1.58 for 2024, up from Tk 1.38 for the previous year, according to a stock exchange filing on Tuesday.

Profits increased mainly due to higher investment income from government securities on the back of rising interest rates against the instruments, said company secretary Md Omar Faruk. The general insurer's commitment to innovation and operating efficiency also helped it stay on the growth trajectory, he added.

Despite the increase in profit, the board of directors has recommended a 10 per cent cash dividend for 2024, the same as for the year before. Investors will get Tk 1 per share against earnings of Tk 1.58 per share.

The total number of shares is 40.55 million, so investors will get Tk 40.55 million in cash dividends in total against a profit of Tk 64 million.

Following the disclosure, the stock of the insurance company rose almost 6 per cent to Tk 28.2 per share on Tuesday on the Dhaka Stock Exchange (DSE).

The company will hold an annual general meeting (AGM) for final approval of the dividends along with other matters on August 25. The record date is July 30.

The insurer's net operating cash flow per share, a measure of a company's ability to generate cash from its operations, dropped to Tk 0.26 per share in 2024 from Tk 0.68 in the previous year due to higher claim settlement.

The company settled 36.26 per cent of claims in 2024, while the average claim settlement ratio for general insurers is 32 per cent in the year, according to the Insurance Development and Regulatory Authority.

The net asset value, which refers to the excess of total assets over total liabilities, reached Tk 14.54 per share in 2024, up from Tk 13.86 in the previous year.

In Bangladesh, general insurance companies do business mainly in three segments -- fire, transport and marine.

Industry insiders say the persistent macroeconomic challenges and runaway inflation hit the general insurers' core business but higher investment income helped increase profits.

As the bank interest rate has increased, the income of insurance companies with cash surplus is growing.

Global Insurance parked Tk 88.4 million in government securities until September 2024, which was Tk 65.4 million a year ago.

The company is yet to disclose its annual premium income for 2024. However, its nine-month net premium income fell 16 per cent year-on-year to Tk 465 million through September 2024.

On the other hand, its nine-month investment income escalated 67 per cent year-on-year to Tk 30 million.

The general insurer is providing insurance coverage for fire, marine cargo, marine hull, engineering, personal accident, overseas medical claims, motor vehicles etc.

babulfexpress@gmail.com