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UOI posts 69.5% jump in FY2019 net profit of S$40.4m

MAINBOARD-LISTED United Overseas Insurance Limited (UOI), a subsidiary of United Overseas Bank (UOB), saw its full-year earnings surge as investment dividends and interest income, as well as net gains on certain divestments, made up for a dip in underwriting profit.

Net profit grew by 69.5 per cent year-on-year to S$40.4 million for the 12 months to Dec 31, 2019, according to audited results released on Wednesday, while the insurer's gross premium income ticked up by 2.6 per cent to S$105.9 million.

Earnings per share rose to 66.05 Singapore cents in 2019 from 38.97 cents in 2018, while net asset value grew to S$6.84 a share, up from S$6.19 previously.

Underwriting profit was down 0.2 per cent to S$24.4 million on higher net claims incurred, given an overall write-back of claims in the same quarter the year before.

Still, gross dividends from investments more than doubled from S$3.7 million to S$7.7 million. Interest income from those investments grew by 8.7 per cent to S$8.6 million.

Meanwhile, UOI recorded a net gain of S$12.5 million on the disposal of investments that are mandatorily measured at fair value through profit or loss, reversing the previous year's S$1 million loss. Similarly, it notched a net gain on the disposal of investments measured at fair value through other comprehensive income, where there had been a loss before.

UOI said in its outlook statement that earnings will come under pressure, given both the competition in Singapore's mature market, as well as expectations of worsening claims from "extreme climate change" and the outbreak of the novel coronavirus disease Covid-19.

The insurer will focus on cross-selling initiatives with UOB, both in Singapore and in the rest of the region, and on developing the intermediary business, it said.

The board has recommended a final dividend of 8.5 Singapore cents a share, unchanged from the year before, as well as a special dividend of seven Singapore cents a share or two cents more, "due to the exceptional investment returns achieved".

This latest declaration takes the full-year payout to 24 Singapore cents a share against 22 cents in 2018. The books close on Apr 28 and the dividend will be paid on May 8.

UOI shares closed up S$0.02 or 0.28 per cent to S$7.05 on Wednesday before the results were released.