By: Topline Securities Private Limited
IGI Insurance Limited (IGIIL) announced 3Q2015 consolidated earnings of Rs436mn (EPS Rs4.0) as against Rs268mn (EPS Rs2.2) in the same period last year. The result was above market expectations.
Underwriting income of IGIIL surged by 97% to Rs76mn in 3Q2015 led by improving macros and improved fire segment business.
Underwriting income from fire segment stood at Rs17mn in 3Q2015 as against a loss of Rs21mn in the same period last year.
Similarly, marine division also reported an increase in underwriting income by 97% YoY to Rs20mn, contributing to growth in underwriting business of the company.
Total premium of IGIIL in the period under review was up by 35% YoY whereas total claims were down 32%. Consequently, claims ratio of the company improved to 62% in 3Q2015 as compared to 123% in 3Q2014.
Due to improved underwriting income, underwriting ratio also increased to 7% in 3Q2015 vs. 5% in the same period last year.
Investment income of IGIIL remained the key earnings driver for IGIIL as it was up by 101% to Rs326mn in 3Q2015. In our view, surge in investment income was due to higher dividend income from Nestle and gain on sale of equities during the quarter.
To recall, IGIIL has significant stakes in companies like IGI life (IGIL), IGI investment bank (IGIBL), Treet Corporation (TREET), Packages (PKGS) and Nestle (NESTLE).