SINGAPORE (Feb 12): United Overseas Insurance reported a 27.7% drop in FY18 earnings to $23.8 million from $32.9 million a year ago.
Gross premium decreased 0.5% to $103.3 million due mainly to market-wide erosion of premium rates and the company's risk control efforts to weed out unprofitable businesses and catastrophe-prone offshore insurance accounts.
Correspondingly, net earned premium decreased 4.5% to $41.4 million as compared to that of the preceding year. Net claims incurred increased by 1.0%.
Net commission income increased 48% due to higher commission recovery from reinsurers.
Given the generally difficult and uncertain investment climate worldwide in 2018, UOI said non-underwriting income decreased by $12 million to $1.3 million due mainly to the unrealised loss from revaluation of “fair value through profit or loss" (FVTPL) investments which unexpectedly declined from an unrealised gain of $10.4 million as at Dec 3 2017 to an unrealised gain of $4.5 million as at Dec 31 2018.
Since then, UOI said these FV TPL investments had recovered and registered an unrealised gain of $7.6 million as at Jan 31.
Overall profit before tax decreased 33.1% to $25.8 million.
UOI said Singapore and other regional economies will likely face more challenges in 2019, amid the many global uncertainties. The local insurance market continues to face intense competition and suffers from inadequate premium pricing.
In such an environment, the insurer will continue to exercise underwriting prudence as it seeks to grow its business.
Shares in UOI closed 10 cents higher at $7.30 on Tuesday.
