Ceylinco Insurance PLC: Latest financial Performance, Ratio Analysis and future outlook

Ceylinco Insurance PLC’s latest financial performance for the year ended 31st December 2023, as reported in their Integrated Annual Report, shows the following highlights:

  • Gross Written Premium (GWP): The company reported a GWP of Rs. 64,303,371,000, which is a 10% increase from the previous year’s figure of Rs. 58,239,661,000.
  • Net Earned Premium: The net earned premium for the year was Rs. 47,380,328,000, up by 9% from Rs. 43,474,912,000 in 2022.
  • Investments and Other Income: The company saw a significant increase in investments and other income, which rose by 21% to Rs. 33,351,328,000 from Rs. 27,586,625,000 in the previous year.
  • Revenue From Subsidiaries: Revenue from subsidiaries also saw a substantial increase of 29%, amounting to Rs. 5,624,904,000 compared to Rs. 4,344,305,000 in 2022.
  • Net Income: The total net income for the year was Rs. 88,113,694,000, marking a 14% increase from Rs. 77,020,273,000 in the previous year.
  • Expenses: The benefits, claims, operation, administration, and other expenses were Rs. 73,720,009,000, which is a 20% increase from Rs. 61,682,273,000 in 2022.
  • Profit Before Share of Associates: The profit before the share of associates was Rs. 14,393,685,000, which is a decrease of 6% from Rs. 15,338,000,000 in the previous year.

These figures indicate that Ceylinco Insurance PLC has experienced growth in premium income and other revenues, although there was a slight decrease in profit before the share of associates. The increase in expenses also reflects the challenging economic conditions and the impact on the company’s operations.

Based on the provided context from the Ceylinco Insurance PLC Annual Report for December 2023, the following key financial ratios can be identified:

  1. Return on Equity (ROE): The ROE for Ceylinco Insurance PLC was reported as 18% for the year 2023, which indicates a decline from the previous year.
  2. Earnings Per Share (EPS): The EPS by the end of the year reached Rs. 1,489, which is a 1.26% reduction when compared to the EPS of 2022.
  3. Solvency Ratio/Capital Adequacy Ratio (CAR): The solvency ratio increased to 219% for the period under review, up from 193% in 2022. This ratio is a measure of the company’s ability to meet its long-term obligations and is an indicator of financial health.
  4. Risk-Based Capital Adequacy Ratio (CAR): For Ceylinco General Insurance Ltd, the Risk-Based Capital Adequacy Ratio was 243% as of 31st December 2023, which is above the regulatory minimum of 120%.
  5. Return on Net Assets (RONA): The RONA was reported as 0.16 for the year 2023.
  6. Net Assets Per Share: The net assets per share for the group were Rs. 3,334.45 as of the end of 2023.
  7. Price Earning (P/E) Ratio: The P/E ratio for voting shares was 6.0 times, and for non-voting shares, it was 2.0 times at the year-end.

These ratios provide insights into the company’s profitability, asset management, and financial stability. It is important for investors and analysts to consider these ratios in the context of the company’s overall performance, industry benchmarks, and economic conditions when making investment decisions.

The future outlook for Ceylinco Insurance PLC, as suggested by the information in the Integrated Annual Report for December 2023, appears to be focused on leveraging the company’s market leadership position, innovation, and strategic measures to navigate through economic challenges and capitalize on emerging opportunities.

Key points that indicate the future outlook for Ceylinco Insurance PLC include:

  1. Market Leadership: Ceylinco Insurance PLC, through its subsidiaries Ceylinco Life Insurance and Ceylinco General Insurance, enjoys market leadership in their respective sectors. The company aims to maintain and strengthen this position.
  2. Innovation: The company has a history of pioneering industry-first innovations. It is likely to continue investing in new products and services that meet evolving customer needs and preferences.
  3. Strategic Measures: In response to economic challenges such as inflation and regulatory changes, Ceylinco Insurance PLC has implemented strategic measures to ensure business growth. These measures are expected to continue to adapt to the changing economic landscape.
  4. Operational Excellence: The company has been recognized for its excellence in financial reporting, which reflects its commitment to transparency and operational efficiency. This is likely to enhance investor confidence and contribute to future success.
  5. Expansion and Growth: With a strong presence in financially rewarding industries and interests both in Sri Lanka and overseas, the company sees opportunities for growth and expansion. It plans to focus on areas with considerable potential, new ventures, and capital investments.
  6. Regulatory Compliance: Ceylinco Insurance PLC works closely with the Insurance Regulatory Commission of Sri Lanka and remains vigilant about regulatory changes that impact the industry. This ensures that the company is well-positioned to adapt to new regulations and maintain compliance.
  7. Customer-Centric Approach: The company’s focus on customer service and innovative solutions is likely to continue, aiming to provide accessible and affordable insurance products despite economic constraints.
  8. Economic Recovery: As the country’s economy recovers from setbacks, Ceylinco Insurance PLC is poised to grasp opportunities that emerge, leveraging its diverse commercial interests and resources for further growth.

In summary, Ceylinco Insurance PLC’s future outlook is one of cautious optimism, with a focus on maintaining market leadership, driving innovation, and strategically navigating economic challenges to seize growth opportunities.

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