Great Eastern's Q4 profit and premiums rise

Gauge of long-term profitability up 8%, says insurer's new group chief exec

Great Eastern's new group chief executive Khor Hock Seng was able to report a strong end to the year despite a slow first six months at his first results briefing yesterday.

He noted new business embedded value - a measure of long-term profitability - jumped 8 per cent to $121.6 million in the three months to Dec 31, from a year ago.

Mr Khor joined the firm last November from rival Aviva after a search that lasted nearly 12 months.

Fourth-quarter net profit grew 5 per cent to $218.8 million. Operating profit from the insurance business rose 9 per cent to $169 million. Quarterly gross premiums increased 12 per cent to $2.53 billion. Total weighted new sales were up 10 per cent at $307.1 million, driven by growth in Singapore and Malaysia.

Full-year net profit dropped 11 per cent to $785.4 million.

Investments in the shareholders' fund for the year grew 29 per cent to $263.4 million, boosted by a gain from the sale of part of the group's investment in New China Life Insurance Company, and foreign exchange gains from United States dollar-denominated investments.

  • AT A GLANCE

  • NET PROFIT: $218.8 million (+5%)

    GROSS PREMIUMS: $2.53 billion (+12%)

    FINAL DIVIDEND PER SHARE: 40 cents, plus special dividend of five cents (unchanged)

New business embedded value for the year rose 3 per cent to $385.2 million, while embedded value - an estimate of long-term economic value - rose 5 per cent to $11 billion, or $23.24 per share. Mr Khor said: "A 5 per cent growth is a very solid performance, and a five-year compound annual growth rate of 9 per cent means we are creating value for shareholders."

Earnings per share for the fourth quarter was 46 cents, up from 44 cents a year earlier, while net asset value per share was $13.16 as at Dec 31, up from $12.41 previously.

The insurer declared a final dividend of 40 cents and a special dividend of five cents, unchanged from a year ago. Chief financial officer Tony Cheong said: "There's the confidence that we make profits and plough back the profits into the business, and the rest to shareholders. So we try to maintain a stable policy for shareholders."

The results were announced before markets opened. Great Eastern shares closed 11 cents higher at $19.66 yesterday.

A version of this article appeared in the print edition of The Straits Times on February 17, 2016, with the headline 'Great Eastern's Q4 profit and premiums rise'. Print Edition | Subscribe