KARACHI, Aug 28: Financial results released by three of the four private sector life insurance companies last week, showed that for all the gruelling competition with the public sector giant, SLIC, private companies were putting their best foot forward.

For the half year ended June 30, 2002, American Life Insurance Company (Alico) and the EFU life posted improved profit, while losses at Commercial Union (CU) stood reduced, compared with the corresponding period of the earlier year. Half term numbers of Metropolitan Life were not readily available. Metropolitan—the smallest of the four—nonetheless was the first in the sector to have disbursed cash dividend. The company paid dividend last year at 5 per cent to the minority shareholders “out of interest free loan by the sponsor directors.”

Alico, which had begun business from May 25, 1995, reported profit of Rs22.4 million for the six months to end-June 2002, up from Rs20.5 million for the similar period of last year. EFU Life Assurance showed profit of Rs8.9 million, which was almost twice the profit of Rs4.5 million earned during the first half of 2001. CU was again in the red, but the loss for the latest half year amounted to Rs10.1 million, down from loss of Rs32.9 million in the same time of earlier year.

During the six months under review, underwriting premium at EFU stood at Rs341.6 million, up from Rs233.4 million in the same period of 2001. Included was renewal premium at Rs169.8 million, that contributed the largest chunk; the figure last time was Rs117.2 million. Interest, return and dividend provided income of Rs71.3 million, compared with Rs42.6 million and the company also wrote back Rs13.9 million reserve for depreciation on investment. Net claims increased to Rs63.9 million, compared with Rs50.1 million.

Gross revenue at CU improved to Rs119 million, up from Rs92.8 million, while interest and other income added Rs34.9 million, against Rs13 million the previous period. Amount of claims paid was not separately shown on the statement released to the KSE. These would be included in operating expenses, which increased to Rs135.4 million, from Rs114.4 million. After an earlier deal with Old Mutual plc, a London-based listed financial services company with CGU International Insurance plc (CGU)—the parent company of CU Life— to acquire 51 per cent stake, broke down, majority shares in the company were now understood to have been acquired by New Jubilee Insurance Company. CU had started individual life insurance operation, from January 1, 1997 (through two branches, one each in Karachi and Lahore) and the group life insurance business from June 30, 1996.

Premium income at Alico rose to Rs108.3 million, from Rs75.5 million in the six months of 2001. Claims and other benefits stood at Rs32.7 million, up from Rs24.1 million for the first half of last year. CU did not show separately expense of management, which at both EFU and Alico amounted to around Rs56 million for the half year.

EFU Life, is listed at the KSE with capital at Rs150 million; its stock is trading at Rs25. Commercial Union, with Rs402 million capital, is quoted at Rs6.60 a share, while the share in American Life is priced at Rs17.95, which maintains the highest Rs325 million in paid-up capital. Though Metropolitan Life with the tinniest capital of Rs60 million, managed to eke out a token dividend for the shareholders, its stock is priced at just about Rs2.65.

From the look of their accounts, a consistent stream of profitability and dividends for shareholders from the private sector life insurance companies, could still be quite a distant away.