Listed insurance firms remain resilient despite pandemic

All the listed insurance companies made profits in the third quarter of this year as the import-export trade gained pace despite the third wave of the pandemic.

The overall picture of the insurance sector was found after analyzing financial results of 43 out of 51 listed insurance companies.

Some 27 companies’ earnings per share (EPS) increased while that of rest 16 companies declined comparing to the previous year’s same quarter.

No company, however, reported a negative EPS.

If the previous nine months are taken into account, 46 of the total listed companies witnessed significant rise in their earnings comparing to the same period of the previous year.

Market analysts attributed the insurance companies’ good performance to accelerated import-export trade, healthy return from stock market, falling commissions on insurance business, reduced unethical competition, and improved overall market
discipline.

Pragati Insurance Chief Executive Officer Md Rezaul Karim told The Business Post, “The commissions on businesses have now come down to a great extent. Additionally, the restoration of market discipline has reduced unethical competition and put a positive impact on the sector.”

An official of City General Insurance said his company’s earnings increased in January-September period thanks to good return from share market and healthy premium income.

Regarding the Covid-19 impact on insurance sector, Rezaul karim said the businesses bounced back in the third quarter defying the pandemic-induced adversities as they incorporated time-befitting policies taking lessons from the previous year’s crises inflicted by the pandemic.

Besides, the import-export trade remained unharmed in the quarter which helped the insurance sector to revive, he said, adding that the sector experienced worst ever crisis in 2020 when the businesses declined 11 per cent.

According to the Dhaka Stock Exchange (DSE) data, Green Delta Insurance saw the highest increase in earnings in the July-September quarter as its EPS increased 1660 per cent or 17.6 times to Tk 1.76 from Tk 0.1 of the previous year’s same period.

On the contrary, Paramount Insurance witnessed highest 82 per cent decline in its earnings in the quarter. Its EPS decreased to Tk 0.49 from Tk 2.68 of the previous year’s same quarter.

In July-September quarter, EPS of 11 life insurance companies -- Pioneer Dhaka, City General, Northern Islami, Prime, Reliance, Express, Crystal, Janata, Mercantile and paramount insurance – declined.