By: Icon Capital Management (Pvt.) Limited
When it comes to premiums, Adamjee Insurance Company Limited (AICL) has been doing an extraordinary job of late; far better than its peer’s. Adamjee Insurance has proven to be an exception by managing to bring strong top line growth throughout the FY14. As per recent results of 1st Quarter 2015 of Company, Gross Premium of the Company has increased by 17% where as the Net Premium has increased by 19%. Net Claims and Net Commission have increased by 12% and 17%, respectively over the corresponding period of last year. The investment income of the Company has decreased by 9% as compared to last year and the Profit Before and After Tax has increased by 15% and 17%, respectively from the same period of last year.
Life Insurance Business: AICL is also into the life insurance business. Although company is suffering from losses in Life Insurance due to the nature of the business as it can be seen in most Life Insurance businesses to suffer a loss during the early years of operations, but these losses gradually turn into profits. Company will enjoy higher earnings after life insurance will contribute towards calculating overall EPS of the group.
Earnings raised on better investment income: We estimate earnings for AICL of Rs6.67 per share. Going forward, we anticipate core business to remain on an upward trajectory in view of notable improvement in macro‐economic indicators with GoP expecting higher GDP growths of 5% and 6% in FY15 and FY16, respectively. In the next quarters with underwriting business expected to post a profit of Rs 1,346 mn in 2015.