By: Arif Habib Limited
Industry Overview: The industry is greatly focused on increasing awareness of insurance coverage within the country. Given huge growth in autos alongside introduction of new variants, potential for higher insurance coverage is present. In the new ‘technological’ era, the industry seems to pose a brighter future for insurance companies.
Crescent Star Insurance Limited Core Business Revenues: After restructuring in 2014, the company is finally compliant and has met its capital requirements, which were partially made through the right shares issue of 412.5% at PKR 6 per share, discount of PKR 4, boosting the company’s issued share capital to 62 million shares. As a result of increased insurance coverage from the health/auto sectors, net premium revenues for the company grew by a staggering 454% YoY during 1QFY15 as compared to same period in the preceding year. After restructuring in 2014, the company has started realizing its large share of unearned premium, recorded at PKR 115 million in FY14 as compared to only PKR 28 million in FY13, hence further augmenting net premiums.
Improved Core Profitability: The striking increase in the company’s underwriting result, an unprecedented 873% YoY increase during 1QFY15 as compared to the preceding year, is due to a stronger handle on management expenses with respect to growth in premiums. In addition, introductions of new products such as ‘CSI Car Asan’ on 1st April 2015, along with other new diverse products such as the company’s underwriting of approximately 5,000-10,000 green and yellow cabs in Lahore is expected to increase core profitability. Company’s bottomline has also turned into profit of PKR 10.3mn during 1QFY15 from a loss of PKR 14.1mn in the same period last year.