GREAT Eastern, : G07 0%the insurance arm of OCBC, on Thursday (Aug 3) posted a 251 per cent rise in net profit for the second quarter ended June, to S$193.2 million from S$55 million in the same period the year before.

The jump in profit came after the group adopted a change in accounting standards on Jan 1, which led to the comparative numbers for FY2022 being restated. Before the numbers were restated, net profit for Q2 2022 was S$282.9 million.

The replacement of Singapore Financial Reporting Standard (SFRS) 4 Insurance Contracts into SFRS 17 impacted the timing of profit recognition and initial shareholders’ equity. It will not significantly affect the group’s business operations, earning prospects and ability to pay dividends, Great Eastern said.

The group will pay an interim dividend of S$0.35 per share on Aug 31. The interim dividend was S$0.10 for the previous financial year. Great Eastern said that it will aim to pay a more steady dividend payment twice a year, targeting a full-year payout that is based on sustainable profits. The company also aims to maintain each dividend amount at a level no lower than the preceding one.

The latest results bring net profit for the first half of 2023 to S$437.2 million, 95 per cent higher than the S$224.1 million recorded in the same period last year.

Before restatement due to a change in accounting standards, net profit for H1 2022 stood at S$502.9 million.

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The group also attributed the rise in H1 net profit to favourable investment performance for its Singapore Life business and shareholders’ fund. It noted that its underlying insurance business “remained healthy”, despite higher-than-expected claims in Singapore and Malaysia.

“Our general insurance business experienced good growth from our retail business, supported by our well-received product proposition,” said Khor Hock Seng, chief executive of the group. 

For Q2 ended June, total weighted new sales (TWNS) lost 39 per cent to S$335 million from S$548.2 million, which reflected lower single-premium sales from the Singapore market.

Similarly, the new business embedded value (NBEV) registered a 9 per cent decline to S$181.5 million from S$200.1 million. However, a more favourable product mix towards protection plans in Singapore and Malaysia allowed NBEV margins to improve, the group said. 

Its new customer base grew by over 150,000 in H1 across the group, it added.

For the six months ended Jun 30, TWNS was S$725.9 million, 31 per cent down from S$1,051.8 million. NBEV stood at S$351.2 million, 10 per cent down from S$390.6 million in the same period a year ago.

Insurance service result in the half-year period dropped 41 per cent to S$371.2 million, led by higher insurance service expenses and net expenses from reinsurance contracts held. This was mainly due to worsening claims experience, said the group.

Great Eastern shares closed at S$18.83, up 1.8 per cent or S$0.33, on Thursday.