Eagle Insurance company Limited recorded consolidated revenue of Rs4,813 million for the year ended 31 December 2006.
- Completes successful first year as part of the global Aviva group
- Consolidated revenue of Rs 4,813 million
- Introduces bancassurance distribution and Unit Linked Insurance Plans (ULIPs) to Sri Lanka.
Eagle Insurance company Limited recorded consolidated revenue of Rs4,813 million for the year ended 31 December 2006. This reflects 13% growth over the previous year. The total gross written premium of life and general insurance business increased 14% compared to the prior year. The profit after tax of Rs523 million is up slightly at 2% above 2005. However 2005 included the benefit high levels of realized capital gains on equity portfolios achieved during the pre-election period in 2005 of Rs124 million). When adjusted for this, the underlying increase in profit after tax is strong at 34%. The recorded profit in 2006 is in line with the company’s profit expectation for the year and is a reflection of the effective execution of planned strategies in the areas of business development, revenue expansion, investment and operational efficiency.
The company was able to maintain its track record in delivering impressive shareholder returns with a return on net assets (RONA) of 31% for the year 2006. Eagle’s balance sheet was further strengthened, with net assets recording a growth of 19% over the previous year.
A final dividend of Rs7.00 per share for the year 2006, has been recommended by the board of directors for the approval by the shareholders in the forthcoming annual general meeting of the company to be held on 30 March 2007. An interim dividend of Rs2.50 per share was paid in December 2006.
As the first year of operation within the Aviva group, 2006, was a year of change for Eagle. The company’s strategic focus towards aggressive business growth is well-aligned with Aviva’s strategy worldwide. During the year a number of new initiatives were launched towards the delivery of this strategy. Responding to a timely opportunity to develop a new business channel, Eagle introduced bancassurance distribution to Sri Lanka by successfully launching two bancassurance partnerships with NDB Bank and Standard Chartered Bank. Aviva’s long-standing experience in bancassurance distribution world-wide was instrumental in developing this business channel. Eagle expects bancassurance to be an important and growing source of future new business.
In 2006, the business performance of the company has been satisfactory considering the heightened level of competition in the local industry. In line with its planned strategies, the company expanded its life sales distribution for improved customer reach and to build further growth momentum. This was achieved through a continuous and focused recruitment drive of the direct sales force together with the expansion of the regional network.
In an extremely competitive environment, Eagle’s general insurance business recorded growth of 21% and thereby further consolidated its market position. The leveraging of Eagle’s life agency distribution network contributed significantly to the growth in the general insurance business. In keeping with Eagle’s strategy of focused growth in key segments, greater emphasis was placed on developing its presence in the personal lines segment through new product offerings and innovative distribution mechanisms. Backed by reinsurance support from the Aviva group’s in-house reinsurance company, Aviva Re, Eagle continued to provide the assurance of security which is paramount to its corporate customers.
Maintaining good governance has always been strength of Eagle and is an integral part of its corporate culture. “I am proud to say that Eagle was recognized as Sri Lanka’s number one in ‘Good Corporate Governance Disclosures’ by the Institute of Chartered Accountants of Sri Lanka at their 2006 Annual Report awards ceremony, and this is an achievement the Company values highly,” stated Mr Deepal Sooriyaarachchi, managing director, Eagle Insurance Company Limited.
Eagle was also ranked as one of the “10 Best Corporate Citizens” for the third successive year and was named “Winner of the Customer Relations Category”, presented by the Ceylon Chamber of Commerce, Best Corporate Citizen Awards. Also, in the area of Corporate Social Responsibility, Eagle’s policy of “CSR without fanfare” was ranked Asia’s number one in the industry by Asian Insurance Review.
Commenting on Eagle’s performance Mr Sooriyaarachchi, said: “2006 has indeed been a year of success where we have delivered a commendable performance yet again. My team and I face the New Year with renewed confidence and we will continue to strive to reach even higher levels of performance in the year 2007. I am confident that we shall succeed”
Grant Barrans, chairman, Eagle Insurance Company Ltd, commended the company on its achievements for the year 2006. He re-affirmed Aviva’s aggressive growth plans in the Sri Lankan market and extended his deep appreciation to the Eagle team for rising up to meet the challenges of 2006, and delivering very satisfactory business results. He also recognized the contribution of the local regulators, the IBSL in setting high standards for the insurance industry and thanked the company’s customers for their continued loyalty and support.
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Notes to editors:
In February 2006, the Aviva group acquired a majority stake in Eagle, with National Development Bank remaining a significant shareholder. Aviva is the world’s oldest insurance group, with a history dating back 300 years to 1696. Today it is the world's fifth-largest insurance group and the biggest in the UK. The group has 58,000 employees serving 35 million customers worldwide.