KARACHI (April 05 2003) : Profit figure of Adamjee Insurance Co surprised every analyst and trader as it reached Rs 219 million, spinning from last year's loss of Rs 517 million.
Adamjee Insurance on Friday announced its financial results for 2002 where profit before tax stood at Rs 267.767 million as compared to Rs 501.256 million loss during the preceding year.
The company's net profit amounted to Rs 218.683 million and it declared 15 percent bonus for the period.
Following the announcement of profit and bonus from the company, the share price of Adamjee Insurance at Karachi Stock Exchange on Friday rose by Rs 2 to Rs 48 a share.
The performance of Adamjee in 2002 was better than 2001 when inefficiency in the UAE business had pushed the company into the red (with a loss of over Rs 500 million) for the first time.
Adamjee's management, after realising that it had made a mistake by trusting the aggressive Dubai manager, has now deputed a competent person from the Karachi Zone.
His task was to curtail the risky car insurance business and ensure effective control mechanism for the future.
Some previous claims from UAE operations poured in during 2002.
Following the policy of reducing the risky overseas business (especially auto business), the company curtailed the share of its offshore business from 31 percent (Rs 1.3 billion) of total gross premium in 2000 to around 10-15 percent in 2002.
Due to this, the overall increase in gross premium is also expected to be curtailed to Rs 4.4 billion in 2002, up marginally by 5 percent from 2001.
The Loss Ratio (claims divided by retained premium) that peaked to 99 percent in 2001 is also estimated to settle at 70-75 percent in 2002, mainly due to reduction in the UAE underwriting business.