- IRCSL-mandated change in basis of valuation of Life Fund generates one-off surplus of Rs 3.456 billion
Ceylinco Life has announced that its net profit for the year ending 31st December 2017 is Rs 9.467 billion, including a one-off surplus of Rs 3.456 billion generated by a change in the basis of the valuation of Life Funds under Section 96A of the Regulation of Insurance Industry Act No 43 of 2000.
Company’s profit before tax has been re-stated as Rs 9.807 billion, the company said.
Consequently, Ceylinco Life’s Earnings per Share for the 12 months increases to Rs 189.35 from Rs 120.22 prior to the change mandated by the Insurance Regulatory Commission of Sri Lanka (IRCSL), and reflects an increase of Rs 127.77 since 31st December 2016. Net Assets Value per Share grows to Rs 412.94 for 2017, Return on Equity to Rs 45.85 and Return on Assets to Rs 8.92.
“We have welcomed the regulator’s decision to change the basis of the valuation of the life fund, but it is important to note that this results in a one-off gain that would impact on growth rates for the current year,” Ceylinco Life Managing Director/CEO Mr R. Renganathan said. “It must also be stressed that the company had recorded very respectable growth rates of 95 per cent and 70 per cent respectively in net and pre-tax profits, before the transfer of the one-off surplus.”
Ceylinco Life has already reaffirmed its market leadership in Sri Lanka’s life insurance industry for the 14th successive year, with premium income of Rs 15.7 billion in 2017.
Total income, comprising of premium income and investment and other income stands at Rs 25.6 billion for the year. Investment and other income improved by 17 per cent to Rs 10.3 billion in the 12 months reviewed, reflecting the success of the investment strategies deployed by the company. The value of Ceylinco Life’s investment portfolio totalled Rs 92.2 billion as at 31st December 2017.
Ceylinco Life sold126,838 new life policies in the year reviewed at an average of 10,570 per month and paid out Rs 6.7 billion in net claims and benefits to policyholders.
The company’s Life Fund, post valuation on the new basis, recorded growth of 4.87 per cent to reach Rs81.7 billion at the end of 2017, following a transfer of Rs 7.3 billion for the 12 months, after the final shareholder transfer.
Total assets grew by a noteworthy 10 per cent to Rs 106 billion in 2017.
Adjudged Sri Lanka’s Best Life Insurer in 2017 for the fourth consecutive year by World Finance, Ceylinco Life has been market leader in Sri Lanka’s life insurance sector since 2004 and has close to a million lives covered by active policies. The company is acknowledged as the benchmark for innovation in the local insurance industry for its work in product research and development, customer service, professional development and corporate social responsibility.