HNB Assurance June quarter premiums up on new life policies

HNB Assurance PLC saw its top line rising in the three months to June, as individual life insurance premiums rose followed by corporate policies but the general insurance premiums fell due to still anaemic motor insurance business hurt by the ban on vehicle imports. 

HNB Assurance reported Rs.2.48 billion in gross written premiums during April-June quarter, up 14 percent from the same period last year, assisted predominantly by the life insurance business as more people and companies sought protection against their staff. 

Individual policy premiums during the quarter rose by a robust 34 percent to Rs.1.41 billion while the corporate policy premiums more than doubled to Rs.39.5 million from the same period last year. 

Meanwhile, the general insurance business premiums of which the bulk consisting of motor segment saw declining due to the decline in motor insurance premiums by 18 percent to Rs.709.3 million. However, fire policy premiums grew between the two periods. 

HNB Assurance performance mirrors the changing industry dynamics, where more people began seeking life and medical protections for them and their dependents with the signs that the brutal pandemic staying longer than one would have expected.  

Meanwhile, longer than anticipated restrictions on vehicle imports weighed down on motor insurance business with low premiums but this segment and the overall general insurance business did well on the bottom line last year, due to less claims resulted from less incidence of accidents when people cut down on commute due to mobility restrictions and work from home arrangements. 

In fact, due to these dynamic bode well for the insurance industry to emerge even stronger on multiple fronts with higher profits, capitalisation and penetration as people and institutions became more risk conscious and sought risk mitigation and transferring options. 

However, during the three months, HNB Assurance booked claims and benefits totalling Rs.878.7 million, up 24 percent from a year ago level, part of which came from the general insurance business due to recovery in mobility this year compared to last year. 

This higher claims and the reversal of deferred tax assets owning to change in tax rate had a bearing on the earnings during the quarter. 

The company reported earnings of Rs.1.26 a share or Rs.188.4 million for the April-June quarter, compared to Rs.2.03 a share or Rs.303.9 million in the corresponding period last year. The company also earned an interest and dividend income of Rs.620.2 million, up just 1.0 percent from the same period last year as yields of government securities fell from a year ago. 

By June-end, the company had a life fund with the size of Rs.19.1 billion and a general insurance fund with the size of Rs.3.3 billion. The company runs its general insurance business under its subsidiary HNB General Insurance Limited established in 2015 with the regulatory mandated industry segregation between life and non-life coming into effect from the following year.

Hatton National Bank PLC has a 59.99 percent stake in HNB Assurance, as the controlling shareholder.