SLOWLY but surely, private insurance companies are making inroads into the life insurance business, which is dominated by the State Life Insurance Company of Pakistan.

“The state-owned SLIC is still the largest player, commanding 57pc of the business,” Javed Ahmed, managing director of Jubilee Life Insurance, says. He, however, proudly proclaims that of the remaining 43pc of the market that is with private sector companies, Jubilee has the lion’s share of 45pc. “Jubilee Life therefore stands out as the largest private sector life insurer in the country in terms of gross written premiums,” asserts the company’s MD.

Formerly the New Jubilee Life Insurance Company Limited, Jubilee Life has been in the business for over 15 years as a life and health insurance company. Engaged in both individual life insurance and group insurance business, Jubilee provides insurance to over 200,000 individual customers and over 1,200 corporate customers, covering in all more than 1.8m lives.

Ahmed claims that the company has developed its product portfolio to cater to the needs of people from all lifestyles and backgrounds. He says, “The company is also catering to the lower segment through micro-insurance products that are designed to keep it affordable for the underprivileged section of society”.

It is perhaps due to the huge frozen blocks of equity with the sponsors that shares of Jubilee Life do not come up for brisk trading at the stock exchange

Business has shown rapid growth in the last five years — at an annual average of 38pc. Gross premiums, which stood at Rs4.4bn in 2009, scaled to Rs17.1bn in 2013 (up 41pc). Its profit-after-tax (PAT) climbed from Rs130m to Rs941m, while investments, including deposits, rose from Rs7.3bn to Rs32.7bn during the period. The company’s total assets multiplied more than fourfold, from Rs8bn in 2009 to Rs34bn at the end of 2013.

In their report to shareholders for the quarter ended March 31, 2014, Jubilee Life’s directors noted that the overall performance of the company was satisfactory. All lines of insurance business had shown growth in new business as well as renewal premiums. For the quarter, the company earned PAT of Rs202m, representing a growth of 58 per cent over PAT of Rs127m in the corresponding quarter of the previous year.

Its paid-up capital stood at Rs721m, including Rs94m marked as reserve for issue of bonus shares. The company held more than twice that sum, or Rs1.504bn, in accumulated profit, taking net shareholders’ equity to Rs2.225bn. Its total assets stood at Rs2.658bn at March 31, of which the heaviest sum of Rs1.043bn were invested in ‘government securities,’ which yielded a return of Rs32m, forming the biggest component of the ‘total investment and other revenue’ of Rs59m for the quarter.

Jubilee Life is a subsidiary of the Aga Khan Fund for Economic Development S.A, Switzerland, which has a 57.87pc stake in the company, representing 36m shares. However, associated companies and related parties together command 83.03pc of the company’s capital. The general public, which included 1,295 shareholders, held 8.56pc shares, while six foreign companies retained 4.26pc shares. The foreign investors included ACICIA Partners LP, ACACIA Institutional Partners LP, ACACIA II Partners LP, ACACIA Conservation Fund-Offshore Limited and Habib Bank AG Zurich.

It is perhaps due to the huge frozen blocks of equity with the sponsors that shares of Jubilee Life do not come up for brisk trading at the stock exchange. At the close of trading on Wednesday, a share of Jubilee Life stood at Rs290, commanding a staggering premium over the par value of Rs10.

The company’s initiatives include Bancassurance, Credit Life and micro-insurance. “Last year, the company launched a scheme with Telenor, under which Telenor’s subscribers are insured by Jubilee Life,” the company’s MD says. Plans for the future include developing the micro-insurance segment and taking advantage of the recent decision of Securities and Exchange Commission of Pakistan to allow insurance companies to enter the Takaful business.

“The company is planning to launch its Shariah-compliant Takaful window within four to six months,” Ahmed says, adding that it is also working on developing products and distribution strategy. He believes that with the already well established infrastructure and extensive network of its Bancassurance partners, Jubilee could capitalise on the opportunity of offering Shariah-compliant products.

Published in Dawn, Economic & Business, June 16th, 2014