Great Eastern profit up threefold to $168.6mln

Strong profit from the Group’s focus on regular premium and protection products drove its stellar performance.

Great Eastern Holdings Limited on Tuesday reported Group profit attributable to shareholders of $168.6 million in Q3-10 compared to $33.6 million in the same period last year, according to an Great Eastern report.

In the first nine months of 2010, Group profit was $422.1 million, an increase of 15% over the same period last year (9M-09: $368.3 million). The improved performance was driven by strong underwriting profit from the Group’s strategy to focus on regular premium and protection products in response to the needs of the market.

Total weighted new sales for the Group in Q3-10 rose by 12% to $191.7 million compared to $171.9 million in Q3-09. In Singapore, sales of regular premium products were 30% higher with both the agency and bancassurance channels performing strongly. In Malaysia, ongoing promotions of investment-linked products helped boost sales of regular premium products, which grew by 55% in Q3-10. Indonesia registered a six-fold growth from initiatives to increase the number and the productivity of agents.

New Business Embedded Value (NBEV), a measure of the long term profitability of new sales, grew strongly by 29% or $77.6 million in Q3-10 from $60.3 million in Q3-09.

Year-on-year, NBEV grew 31% from $156.7 million to $204.8 million against sales growth of 19% for the same period.

Other Financial Highlights
For Q3-10, profit from the Group’s insurance operations registered $159.2 million (Q3-09: $211.5 million). Underwriting profit continued to grow at a healthy pace as a result of sales of protection products, better claims experience and lower management expenses. Investment returns in Q3-10 were the strongest in 2010 and more than compensated for the dip in financial markets during Q2-10. On the other hand, Q3-09 returns were much higher in comparison as the performance was skewed positively by strong recovery of credit markets after the financial turmoil in 2008.

Profit from investments in Shareholders’ Fund in Q3-10 was $34.4 million whereas in Q3-09, a loss of $195.3 million was incurred which was largely due to a loss of $213.3 million related to Great Eastern’s one-time redemption offer to GreatLink Choice policyholders.

Fees and other income amounted to $16.3 million in Q3-10, similar to Q3-09.