Eagle Insurance plc has announced that its board of directors has recommended a first and final dividend of Rs 7.00 per share for approval by its shareholders at the Annual General Meeting of the company.
- Further strengthens solvency providing greater security to customers
- Declares dividend of Rs 7/- per share
- Maintains growth momentum in challenging times
- Declares 10% gross dividends for life policyholders
Eagle Insurance plc has announced that its board of directors has recommended a first and final dividend of Rs 7.00 per share for approval by its shareholders at the Annual General Meeting of the company. In its constant endeavour to deliver value to all stakeholders, the company has declared a gross dividend of 10% to its life policyholders in 2008.
The company continues to maintain its record of steady profits despite the many challenges posed by the external environment with profit after tax reported at Rs 464 million for the year. Pre-tax profit recorded an increase of 11% over 2007 to reach Rs 605 million, and this includes the gross up of tax withheld at source on interest income from government securities of Rs 171.2 million. The profit performance of 2008 is in line with the company's expectations and results in a return on net assets of 27.2%. It is commendable that the company has contained its growth in management expenses at a satisfactory level of 11% in an environment of relatively high inflation, and this has helped sustain the bottom line performance. Total net assets grew by 10% in 2008 to reach Rs 2,224 million by year end.
Eagle Insurance maintains a solvency ratio of 1.32 times the required solvency margin for life business as at end 2008 where the required solvency margin was Rs 663 million and the company maintained an excess in admissible assets of Rs 209 million. The solvency ratio for the general insurance business as at end 2008 was 3.19 times the required solvency margin where the required solvency margin was Rs 240 million and the company maintained an available solvency margin of Rs 765 million. As such, the company maintains a strong financial position and the technical provisions and reserves for both life business and general insurance business are well above the adequate level to operate the business. A strong financial position assumes greater importance in the context of the financial crisis currently experienced by many institutions.
During the year, the company placed greater emphasis on the quality of its book of business considering the prevalent economic and business climate, and this is reflected in the modest growth recorded in gross written premium. Life business gross written premium grew by 15% during 2008 and general insurance business gross written premium recorded a growth of 10%. However, the consolidated revenue of the company recorded an appreciable growth during 2008 primarily due to the higher income earned by the investment portfolios. Revenue of the group for the year recorded an impressive 24%, and this includes the gross up of tax withheld at source on interest income from government securities stated above. The growth in revenue excluding this is still impressive at 21%.
The bancassurance channel pioneered in Sri Lanka by Eagle continues to grow in significance contributing to the top line performance of the Company. The company will continue to leverage on Aviva's global expertise and invest in the bancassurance channel. With three strong bancassurance relationships currently in place, this channel contributes almost 7% of gross written premium of the company.
Eagle continues to receive recognition for the manner in which it does business. For its deep commitment to corporate social responsibility the Company was adjudged second in the "less than Rs 10 billion turnover" category, by the Ceylon Chamber of Commerce at the "Best Corporate Citizens Awards 2008". Eagle was also recognised at the SAFA (South Asian Federation of Accountants) Best presented Accounts Awards, receiving the Bronze Award in the Non-banking Financial Sector category for its 2007 Annual Report.
In his review on the company's performance, managing director, Deepal Sooriyaarachchi comments that: "Despite an extremely challenging macro-economic environment, we are proud of our achievements in 2008. The company's earnings were in line with expectations. We believe that the renewed focus on quality of business will yield results in the future. As an insurer who takes on the risks of others, we ensure that our business is financially solid. We take great pride in having built a very sound balance sheet over the years which enables us to stand strong in the face of financial turmoil."
The chairman of the company, Craig Brackenrig commends Eagle on its performance, saying: "Eagle's committed employees and members of the direct sales force have continued to deliver exemplary service to drive Eagle's business forward. I am confident that Eagle will fulfill its purpose of delivering Prosperity and Peace of mind to its customers and continue to demonstrate the highest standards of professionalism to deliver beyond the expectations of all stakeholders."
Commenting on his outlook for the company, the managing director states: "I see Eagle as a successful, respected and financially strong business entity delivering on our promise to stakeholders."
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Nishanthi Gunewardene
Senior Executive, Integrated Marketing Communications
Eagle
+94 11 2310078
About Aviva
Aviva is the world's fifth-largest* insurance group, serving over 50 million customers across Europe, North America and the Asia Pacific. Aviva's main business activities are long-term savings, fund management and general insurance, with worldwide total sales of £51.4 billion and funds under management of £381 billion at 31 December 2008. We are the largest insurance services provider in the UK and one of the leading providers of life and pensions products in Europe. (* based on gross worldwide premiums at 31 December 2007.)
In Asia Pacific, Aviva operates in Australia, China, India, Korea, Sri Lanka, Hong Kong, Singapore, Malaysia, Taiwan and the Middle East. Our long-term savings products and services are distributed through a multi-channel network, which includes a direct sales force, insurance intermediaries and bancassurance partners.
In February 2006, the Aviva group acquired a majority stake in Eagle Insurance.