Union Assurance continues focus on sustainable growth

UA has reported Rs. 2.5 billion gross written premiums for the first quarter of 2019. This was 1% below the figure reported in the prior period, mainly due to decline in new business premiums as the company aligned its distribution channels to target market segments with potential to generate sustainable growth.

Profit before tax amounted to Rs. 246 million, compared with Rs. 304 million reported in the first quarter of 2018. The drop in profit is mainly due to reduced investment yields and amortisation of expenses related to expanding the bancassurance distribution channel.

Profit after tax of Rs. 178 million was 41% lower than previous period due to Rs. 68 million tax charge as per the Inland Revenue Act which came into effect from 1 April 2018. The tax expense was set off against the deferred tax asset.

Profit in the quarter does not include a surplus from the life business which is actuarially valued at year end. 

The company reported a 10% increase in investment income from Rs. 983 million in 2018 to Rs. 1.1 billion in 2019. The decline in equity investments is reflected in fair value losses which increased from Rs. 128 million in 2018 to Rs. 497 million in 2019. Hence total revenue declined by 7% to Rs. 3.1 billion for the period under review.  Net insurance claims and benefits increased by 31% mainly due to maturities and other payouts in line with contractual obligations. Underwriting and net acquisition costs increased by 1% while operating, administrative and selling expenses increased by 9% mainly due to increases in staff, branch infrastructure and distribution related expenses.

As a result of the above changes, UA’s life fund stood at Rs. 32 billion as at 31 March 2019, with a healthy solvency ratio indicating the financial strength of the business. 

As per the LMD Brands Annual, Union Assurance brand was valued at Rs. 2.5 billion for the year 2019. This is an increase of Rs. 700 million compared to 2018 reflecting that the company has doubled brand value within a short span of three years. Further the company’s brand rating was upgraded from (AA-) to (AA). 

UA is anchored by a team of experienced and dynamic professionals, and is backed by a strong capital base and reinsurance partnerships with highly rated global reinsurers. Celebrating over 30 years of excellence, Union Assurance continues to invest in people, products and processes to become a true partner in success for all our stakeholders.