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Most saw their profits soar between July and September
Most of the listed general insurance companies have reported higher net profit between July and September from a year earlier on the back of increased premium income.
Of the 36 general insurance companies listed on the Dhaka Stock Exchange, 28 have logged in profit growth and seven saw their profit tumble.
The bar on insurers from offering more than 15 per cent commission to agents by the insurance regulator accounts for the higher profit, said Sheikh Kabir Hossain, president at the Bangladesh Insurance Association.
Previously, companies would offer as much as 60 per cent of the premium as commission to get business, which, according to good companies, was hurting the industry.
“We have worked closely with the regulatory body, the Insurance Development and Regulatory Authority (IDRA) to keep the commissioning under 15 per cent. This increased the premium income of the companies,” Hossain added.
As per the unaudited financial statement, Bangladesh General Insurance Company (BGIC) registered the highest profit growth of 2,700 per cent between July and September.
Its net profit stood at Tk 1.5 crore, which was at Tk 0.1 crore a year earlier.
Paramount Insurance logged in net profit of Tk 10.1 crore, up a staggering 1,719 per cent year-on-year. Its profit in the nine months of 2020 was up 243 per cent.
The abnormally high profit growth was due to increased premium income and profit from other sources, said ZharnaParul, company secretary of Paramount Insurance.
As per the unaudited financial statement, United Insurance registered the third-highest profit growth of 1,160 per cent in the third quarter of 2020.
Its profit stood at Tk 4.7 crore. A year earlier, it logged in losses of Tk 0.4 crore.
According to their financial data, the profit of Asia Insurance, Green Delta, Pioneer Insurance, Peoples Insurance, Janata Insurance, Islami Insurance, Mercantile Insurance, Rupali Insurance, Continental Insurance and City Insurance also rose.
On the other hand, Sonar Bangla Insurance saw the highest fall in profit, by a whooping 80 per cent, to Tk 0.6 crore from Tk 3 crore during the quarter.
Federal Insurance, Asia Pacific, Nitol Insurance, Standard Insurance, Eastland Insurance and Agrani Insurance also saw their profit shrivel between 1-69 per cent during the period.
Coincidentally, insurance companies, especially the general insurance ones, are having an unbelievable run at the stock market in recent months.
“We are investigating the insurance companies’ significant share price increase in the interest of the investors. We want to know how some companies’ share price rose as much as 100-200 per cent in a short time,” said Mohammad Rezaul Karim, executive director and spokesperson of the Bangladesh Securities and Exchange Commission.
(DT)
