Paramount Ins profit drops 7.5pc on premium income decline
The insurer declares 10pc cash dividend
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Paramount Insurance saw its net profit drop by 7.5 per cent year on year to Tk 70.35 million in 2023, primarily due to a decline in premium income amidst persistent macroeconomic challenges.
In 2022, the company turned a profit of Tk 76.04 million.
According to the price-sensitive information published on Thursday, the general insurer's earnings per share (EPS) stood at Tk 1.73 for 2023, down from Tk 1.87 in the previous year.
Despite the lower profit, the company's board of directors recommended a 10 per cent cash dividend for 2023, consistent with the dividend payout in the previous year.
An official of the company, who declined to be named, attributed the lower profit to a combination of factors, including a strong dollar, fall in maritime insurance income, and low returns from stock market investments.
The marine insurance business witnessed a sharp decline due to a fall in the opening of letters of credit (LCs) caused by the dollar crisis stemming from the Russia-Ukraine war.
The overall business activities in the country slowed down due to prevailing macroeconomic challenges, which also impacted the general insurer's business.
The company is yet to disclose its annual gross premium income for 2023. However, its nine-month gross premium income fell by more than 7 per cent to Tk 366 million through September 2023.
While deposit interest income grew in the latter half of the year due to rising interest rates, stock market investments fell owing to the bearish market trend, said the official.
Additionally, almost non-existent third-party insurance for vehicles also impacted their earnings, he added.
Third-party insurance is a policy purchased by the insured from the insurer for protection against claims by a third party. However, in the country, third-party insurance products are not commonly purchased as it is not mandatory under the Road Transport Act 2018.
The company will hold its annual general meeting (AGM) for final approval of the dividends along with other matters, with the record date set on May 6.
The company has also reported a net asset value per share of Tk 26.56 and net operating cash flow per share of Tk 1.54 for 2023, as compared to Tk 25.81 and Tk 3.16 respectively in 2022.
The stock price of the general insurer fell by 1.36 per cent to close at Tk 50.90 on Thursday.