Media Release | 4 May 2012
Great Eastern's First Quarter 2012 Net Profit after Tax Rose 65% to S$262.5 million
Earnings underpinned by growth in underwriting profit and better investment performance
Great Eastern Holdings Limited today reported profit attributable to
shareholders of S$262.5 million for the quarter ended 31 March 2012 (Q1-12), a rise of 65%
compared with the same quarter last year. Net profit was supported by growth in underwriting
profit, reflecting the successful shift in product mix over past quarters. The Group's performance
also benefited from an increase in investment income as well as mark-to-market gains from the
recovery of global financial markets.
The Group reported total weighted new sales of S$176.8 million, with a significant shift from single
to regular premium products. The Singapore business benefited from the strong, sustained
demand for regular premium products from the bancassurance channel, in particular the premier
banking customer segment. Malaysia continued to register healthy sales of investment-linked
During the quarter, the Group's NBEV grew by a healthy 14% against Q1-11 to S$83.8 million,
resulting from the improvement in product mix towards regular premium and protection-based
products from the tied agency and financial advisory channels. NBEV in Singapore rose by 29%
to S$50.8 million, contributed by higher sales of protection plans. In Malaysia, NBEV was
supported by the continued momentum in the sales of investment-linked products.
Compared with Q1-11, profit from insurance operations rose by 45% to S$226.4 million.
Underwriting profit continued to grow, reflecting the Group's strong insurance fundamentals. In
addition, profit from insurance operations also benefited from the recovery of global financial
markets. During the quarter, favourable credit and equity markets resulted in mark-to-market
gains in asset valuations, leading to a significant increase in investment profit, which is a
component of profit from insurance operations.
Profit from investments in Shareholders' Fund rose 170% against Q1-11 to S$69.2 million. The
increase was largely caused by mark-to-market gains in held-for-trading investments in Q1-12, in
line with the improved investment climate.
In Q1-12, fees and other income amounted to S$15.3 million. Compared with Q1-11, expenses
increased to S$21.8 million, reflecting higher staff costs.
Great Eastern remains strongly capitalised. The Capital Adequacy Ratios of the Group's
insurance subsidiaries in both Singapore and Malaysia exceeded 200%, well above the minimum
regulatory ratios of 120% and 130% in Singapore and Malaysia respectively.
Commenting on the Group's Q1-12 financial results, Group CEO Chris Wei said:
"I am heartened by the Group's performance in Q1-12. We achieved strong results for our
underwriting business and continued to record healthy growth in terms of long-term economic
profitability. With a sizable protection gap in Asia, we are confident that our strategy of promoting
regular premium, protection-based products will continue to address the needs of customers while
delivering sustained value-creation across the markets in which we operate. In Singapore, we see
opportunities to enhance protection coverage alongside health concerns of an ageing population
and evolving needs of a growing, affluent middle class. Our recent launch of Supreme Protect, an
innovative whole life plan, as well as a suite of enhanced Personal Accident plans and riders seek
to provide customers with greater benefits, flexibility and superior value. In Malaysia, there is
further potential for us to serve the needs of young working adults and to increase the penetration
of takaful products."
"In response to changing customer behaviour and their preference to be engaged through digital
and social media, we have strengthened our customer engagement efforts through Facebook,
YouTube and Twitter. Customers can also look forward to exciting new initiatives in the coming
months as we gear up efforts on delivering our mission of creating a unique customer experience
for all our customers."
About Great Eastern
Great Eastern is the oldest and most established life insurance group in Singapore and Malaysia. With
$57 billion in assets and around 4.0 million policyholders, it has two successful distribution channels - the
tied agency force and bancassurance. The Company also operates in China, Indonesia, Vietnam, and
Brunei. Great Eastern Life Assurance Company Limited has been assigned the financial strength and
counterparty credit ratings of 'AA-' by Standard & Poor's, one of the highest among Asian life insurance
companies. It was voted Life Insurer of the Year at the Asia Insurance Industry Awards 2011 by Asia
Insurance Review. Great Eastern's asset management subsidiary, Lion Global Investors Limited, is one of
the largest private sector asset management companies in Southeast Asia.
Great Eastern is a subsidiary of OCBC Bank, the second largest financial services group in Southeast Asia
by assets. It is one of the world's most highly-rated banks, with a long-term credit rating of Aa1 from Moody's.
It is also ranked by Bloomberg Markets as the world's strongest bank. OCBC Bank's key markets are
Singapore, Malaysia, Indonesia, and Greater China. It has a network of over 500 branches and
representative offices in 15 countries and territories, including more than 400 branches and offices in
Indonesia operated by its subsidiary, Bank OCBC NISP.
For more information, please contact:
Tan Seck Geok
Head, Group Corporate Communications
Tel: + (65) 6248 2215
Head, Group Strategies & Investor Relations
Tel: + (65) 6248 1940