SINGAPORE - United Overseas Insurance's (UOI's) first quarter net profit dipped 20.8 per cent to $9.4 million.

This was on the back of a 4.5 per cent drop in gross premiums written to $29.3 million for the three months to March 31, due mainly to timing difference in the booking of an insurance scheme and portfolio pruning by management.

In the absence of this difference, the reduction is only 0.9 per cent.

Net earned premiums increased by $100,000 or 1 per cent while net claims incurred decreased by $600,000 or 17.8 per cent.

With better underwriting results, net commission income increased by $1.1 million. Management expenses increased by $600,000 to $3.1 million.

Underwriting profit increased by 21.5 per cent to $6.9 million, due mainly to lower net claims incurred and higher net commission income.

Non-underwriting income, on the other hand, fell to $4.3 million from $8.5 million, due largely to a one time investment gain available last year.

Annualised earnings per share firmed to 59.74 cents from 58.86 cents previously while net asset value per share swelled to $5.15 compared to $4.96 as at Dec 31.

Looking ahead, UOI said that growing business in a matured and highly competitive market has become increasingly challenging. This is even more so when the emphasis is focused on the quality of the business.

"Despite signs of economic recovery globally, numerous unpredictable dynamic factors would likely persist to affect the operating environment and profitability," it noted.