UOI posts net profit of S$32.9m for FY17, up 42.5% from a year ago

UNITED Overseas Insurance (UOI) on Monday posted a net profit of S$32.9 million for the full year ended Dec 31, 2017, up 42.5 per cent from S$23.1 million previously, contributed partly by net fair-value gains on financial derivatives and increase in non-underwriting income.

This represents an annualised earnings per share of 53.88 cents for FY17, up 42.5 per cent from 37.82 cents.

However, gross premium was 3 per cent lower at S$103.7 million for the year, due mainly to the company's portfolio pruning and more selective risk acceptance in view of inadequate premium pricings taking place despite deteriorating market experience in certain classes of business.

Correspondingly, net earned premium decreased S$1.6 million or 3.6 per cent to S$43.4 million as compared to that of the preceding year.

The total dividend for the financial year ended Dec 31, 2017 would be 22 cents per share.

In a filing to the Singapore Exchange, UOI said that the general insurance market is not expected to benefit to any extent in light of continued intense competition resulting from unabated growth in worldwide market capacity despite improving economic outlook locally and regionally.

"Premium rates are likely to continue their slide as to render it difficult to underwrite profitably in many lines of business. Digitised online service will increasingly become an essential part of insurance operations. It will add to the business cost but may not contribute substantially to non-life business growth initially," said UOI.

On the investment front, UOI said that the operating environment may become more conducive. However, many uncertainties remain globally, particularly in the area of geopolitics, it said, adding that "prudence will continue to be the best policy".