Business

Great Eastern's Q3 profit up 21% on local growth, buoyant financial markets

Continued growth here and buoyant financial markets sent third-quarter earnings up 21 per cent at insurer Great Eastern Holdings (GE).

Net profit was $235.5 million for the three months to Sept 30, backed by higher profit from the insurance business, said the firm yesterday.

Great Eastern, a unit of OCBC Bank, noted that profit from insurance grew 22 per cent to $208.6 million, owing to "higher contribution from its Singapore business and gain in our investments from favourable financial market conditions".

Profit from investments made with shareholder funds slipped 10 per cent to $53.4 million, due largely to lower income, partly offset by gains from selling assets, mainly equities.

Chief executive Khor Hock Seng said growth came from "significant contribution from both our agency and bancassurance channels".

Mr Khor added: "The group's agency force is a very important and core channel for us, and we are committed to devote key resources to strengthen the agency channel and enhance its effectiveness."

His comments came after at least 300 GE agents - almost 10 per cent of its agency size - moved to rival AIA's new financial advisory arm, as reported by The Straits Times last month.

The firm is also among those pursuing plans to cut stakes in its Malaysian units on the back of government caps on foreign ownership.

Quarterly operating profits grew 18 per cent to $158.6 million from last year.

Gross premiums expanded 33 per cent to $3.1 billion, total weighted new sales rose 16 per cent to $306.3 million, while new business embedded value - a measure of long-term economic profitability - dipped 10 per cent to $116.7 million.

Quarterly earnings per share was 50 cents compared with 41 cents a year earlier, while net asset value per share was $15.22 as at Sept 30, compared with $13.92 as at Dec 31.

GE shares closed four cents higher at $26.20 yesterday.

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