KARACHI: State Life Insurance Corporation has posted a profit after tax of Rs810 million in 2013, showing 5.6 per cent growth over year 2012.
The company released the financial report after a period of one and half year mainly due to non-functioning board of directors.
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The profit of State Life for 2013 was equal to 40.2% of the combined earnings of the six private-sector life insurance companies that operated in that year. However, State Life’s profit was still less than the earnings of Jubilee Life Insurance (Rs941.4 million) and EFU Life Assurance (Rs929.1 million) recorded in the same year.
While State Life lags behind other life insurance market players in terms of profitability, several key performance indicators show it is far ahead of its private-sector counterparts. For example, total assets of State Life at the end of 2013 amounted to Rs420.8 billion after recording an increase of 20.5% over the preceding year.
In contrast, combined assets of the six private-sector life insurance players in 2013 clocked up at Rs102.4 billion, which is roughly one-fourth of the total assets of the government-owned entity.
Similarly, total gross premiums of State Life were Rs65.9 billion in 2013, which is 1.6 times of the combined total gross premiums of all private-sector life insurance players (Rs40.9 billion) in the same year.
According to a reform committee constituted by the Securities and Exchange Commission of Pakistan (SECP) in 2014, State Life appeared to be “overstaffed” relative to its private-sector competitors. The committee also reported that State Life seemed to have “relatively high agency costs compared to its peers in other countries”. Moreover, it said there were concerns about “procedural irregularities at decentralised levels” at State Life.
