AIA Lanka 3Q net soars amid higher premiums and investment income

AIA Insurance Lanka PLC (AIA), the local unit of Asia-based AIA Group Limited, saw its September quarter net profits (3Q16) soaring 45 percent to Rs.79.2 million from a year ago as the life business premiums rose and the income from its investment portfolio increased amid rising interest rates, the interim financial accounts showed. 

The earnings per share rose to Rs.2.57 from Rs.1.78 a year ago. 
The gross written premiums (GWPs) rose over 15 percent year-on-year (YoY) to Rs.2.57 billion. 
Further, the investment income rose 23 percent from a year ago to Rs.1.22 billion as the market interest rates were on an upward pressure during the period.  
The AIA Insurance Lanka group had a financial assets base of Rs.41 billion by the end of September 30. 

AIA Group Limited, the third largest Asia-based insurer by market value, entered the Lankan market in December 2012 by acquiring 92.7 percent of the then AVIVA NDB Insurance in a deal valued at US $ 109 million. 
In October 2015, the company divested its fully-owned general insurance subsidiary, AIA General Insurance Lanka Limited, to Janashakthi Insurance PLC for a consideration of Rs.3.2 billion to fully concentrate on life business. 
AIA Insurance Lanka is the third largest life insurer in Sri Lanka based on GWPs. However, country’s life insurance penetration level stands just above 0.5 percent of the gross domestic product based on GWPs.  

The Hong Kong stock exchange listed life insurance giant, which already has presence in 18 Asian markets, further bets its future growth on increasing disposable incomes, powerful demographic and urbanization trends and very low insurance penetration rates in the region. 
China is the second biggest market for AIA Group based on the Value of New Businesses (VONB). 
Meanwhile, during the quarter AIA Insurance Lanka paid Rs.1.13 billion as net claims and benefits. 
During the nine months ended September 30, 2016, the company posted a net profit of Rs.198.7 million or Rs.6.46 a share, recording an increase of 40 percent from the same period last year. 
The surplus of the life insurance business is reported annually at the year end and is therefore not included in the profit reported during interim periods in the year. 

The GWPs for the same period rose 22 percent YoY to Rs.7.42 billion. Investment income grew 24 percent YoY to Rs.3.51 billion. The company paid Rs.3.47 billion worth of net claims and benefits. 
AIA Group had a 97.16 percent stake in AIA insurance Lanka PLC as of September 30, 2016.