SINGAPORE (Feb 5): United Overseas Insurance (UOI) reported a 72.9% rise in 4Q17 profit after tax to $12.3 million, bringing FY17 profit after tax to $32.9 million.
Gross premium written for 4Q17 decreased by 0.6% to $21.3 million from a year ago.
Net earned premium increased by 2.9% to $11.7 million in 4Q17 compared to 4Q16 due to an increase in policy retention.
Net claims incurred decreased by $1.4 million or 59.6% due to improvement in claims experience.
Net commission income increased by 32.8% to $3.5 million.
Management expenses was lower by $0.2 million or 5.9%.
Consequently, underwriting profit in 4Q17 increased by $2.8 million or 32.2% to $11.5 million.
The company recorded a non-underwriting gain of $2.7 million due mainly to gains arising from disposal of investments.
Profit before tax for 4Q17 increased by 74.5% to $14.2 million due mainly to improvement in both underwriting profit and investment results.
UOI says despite improving economic outlook locally and regionally, the general insurance market is not expected to benefit to any extent in light of continued intense competition resulting from unabated growth in worldwide market capacity.
"Premium rates are likely to continue its slide, rendering it difficult to underwrite profitably in many lines of business," says UOI.
Meanwhile, digitised online service will increasingly become an essential part of insurance operations. And while it may not contribute substantially to non-life business growth initially, it will add to the business cost.
On the investment front, the operating environment may become more conducive. However, many uncertainties remain globally, particularly in the area of geopolitics.
"Prudence will continue to be the best policy," UOI concludes.
Shares in UOI closed 5 cents lower at $7.25 on Monday.
