Great Eastern Holdings (GEH) G07 , a member of the OCBC group, has reported earnings of $193.2 million for the 2QFY2023 ended June 30, 251% higher than the earnings of $55 million in the corresponding period the year before.
Earnings for the 1HFY2023 rose by 95% y-o-y to $437.2 million while earnings per share (EPS) stood at 92 cents.
The higher earnings were driven by a favourable investment performance in the group’s Singapore Life business and shareholders’ fund. Its underlying insurance business stood “healthy” despite the higher-than-expected claims in Singapore and Malaysia.
During this quarter, the group’s earnings were based on the SFRS (I) 17 insurance contracts basis. The group’s earnings for the corresponding period the year before have been restated. SFRS(I) 17 replaces SFRS(I) 4 and is effective for annual periods beginning on or after Jan 1. The accounting change will affect the timing of profit recognition and initial shareholders’ equity, but will not change the way the group’s business operates.
For the 2QFY2023, total weighted new sales (TWNS) fell by 39% y-o-y to $335.0 million due to lower single premium sales from Singapore and offset by growth in regular premium sales particularly in protection plans and whole life plans from the group’s core distribution channels. TWNS for the 1HFY2023 fell by 31% y-o-y to $725.9 million for the same reasons.
New business embedded value (NBEV) for the 2QFY2023 fell by 9% y-o-y to $181.5 million in line with the decline in TWNS. NBEV for the 1HFY2023 fell by 10% y-o-y to $351.2 million for the same reason.
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NBEV margin for the 2QFY2023, however, rose by 10.8 percentage points q-o-q and 17.7 percentage points y-o-y to 54.2% due to a more favourable product mix towards protection plans in Singapore and Malaysia. NBEV margin for the 1HFY2023 rose by 11.3 percentage points y-o-y to 48.4%.
According to GEH, the group’s core business lines remain resilient and strong with steady growth in new customer count. Its total new customer base grew by over 150,000 in the 1HFY2023.
GEH’s capital adequacy ratios in its insurance subsidiaries in Singapore and Malaysia stood “strong and well above their respective minimum levels”. According to GEH, the new method of reporting did not significantly affect the group and its subsidiaries’ capital adequacy ratios.
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As at June 30, cash and cash equivalents stood at $9.02 billion.
An interim dividend of 35 cents per share has been declared. It will be paid out on Aug 31.
In its Aug 3 statement, GEH says it is looking to pay dividends twice a year, with the amount targeting a full year payout to shareholders based on the sustainable profit level of the group. Dividends will be progressive in line with the profit trend.
“While the global business landscape continues to be volatile and uncertain, we remain operationally agile to execute our growth plan and deliver long-term sustainable value for our stakeholders. During the first half of the year, we implemented several key initiatives across our markets with customer-centricity in mind, including a first-in-market multi-generation income product under our conventional life business in Malaysia to support our customers’ legacy planning needs. Our family takaful business continued to focus on growing and strengthening our financial representatives’ footprint to expand our customer reach,” says GEH CEO Khor Hock Seng.
“Across the group, our general insurance business experienced good growth from our retail business, supported by our well-received product proposition. Looking ahead, we will continue to stay agile and adopt new approaches to help our customers achieve financial freedom as we celebrate 115 years of establishment this year,” he adds.
Shares in GEH closed 2 cents lower or 11% down at $18.50 on Aug 2.
