News Asia08 Apr 2021

Pakistan:Non-life insurance sector posts 5% increase in net profits in 2020

| 08 Apr 2021

Net profits in the non-life insurance sector in 2020 rose by 5% compared to 2019, largely because of a lower effective tax rate, according to Topline Securities. The analysis is based on the financial results of 12 listed insurance companies which in aggregate account for 83% of the capitalisation of the non-life insurance market.

In comparison, in 2019, listed non-life insurers saw aggregate profits jump by 19% to PKR7.1bn ($46.4m) due to a sharp rise in investment income.

In 2020, underwriting income in the sector declined by 5% to PKR2.9bn from PKR3.0bn in 2019. However, investment income jumped by 11% to PKR5.4bn last year. Investment income accounted for 78% of the total profits of non-life insurance companies in 2020.

The underwriting income came under pressure because net premiums dropped by 5% in 2020 largely due to a slowdown in economic activities amidst the COVID-19 pandemic and lockdowns.

The net claims in the sector declined by 8% to PKR19.3bn in 2020. The sector’s claims ratio fell to 53% in 2020 compared to 54% in 2019.

The rise in investment income of the sector was largely due to gains on the sale of equities and fixed income instruments, Sunny Kumar at Topline Securities said.


| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.

Other News

Follow Asia Insurance Review