Eagle revenue up but profits fall sharply in Q3, 2006

Eagle Insurance Company’s consolidated revenue rose to Rs 3,309 million for the nine months ended 30th September 2006 but profits fell sharply.

The company said total gross written premium income of the company was Rs. 3,091 million, an increase of 13%.

Pre-tax profit for the period was Rs.71.6 million, 51% lower than the corresponding period of 2005, mainly due to high non life claims and lower investment income. As in previous years, the quarterly results do not include a contribution from the life insurance business, which is determined annually after the actuarial valuation at the year end and is included in the full year results, the company said.

Although the year-to-date profit is significantly lower than the same period last year, an interim dividend of Rs. 2.50 per share has been approved by the board, which maintains the interim dividend at the same level as the prior year. The amount of any subsequent final dividend will depend upon the level of profits reported in the audited accounts for the full year.

Managing Director Deepal Sooriyaarachchi said, “Our third quarter results are satisfactory. We are in the process of expanding our distribution reach. We have put in place strategies to enhance distribution effectiveness and achieve continued growth momentum.”

Leveraging on the bancassurance expertise of the Aviva group, the company has secured Standard Chartered Bank as its second bancassurance partnership.

Eagle Insurance chairman Grant Barrans said the results were satisfactory especially given the difficult domestic environment in Sri Lanka currently.

In February 2006, the Aviva group acquired a majority stake in Eagle, with National Development Bank remaining a significant shareholder. Aviva is the world’s oldest insurance group, with a history dating back 300 years to 1696.