Sunlife Insurance holding on to dear life
While others have already been gradually drawing in new clients, one insurer has been showcasing a dismal performance to this extent that its gross premium in 2018 reached half of what it had been five years back.
Sunlife Insurance stated in its gross annual report that its gross premium was Tk 80 crore in 2018. In 2015, it was Tk 165 crore.
Its life insurance coverage fund amounted to Tk 231 crore in the first three quarters of 2019.
In this same period in 2018, it had been Tk 301 crore, in line with the company's latest data published on the website of Dhaka Stock Exchange (DSE).
Since being listed in 2013, it provided 18 per cent stock dividend altogether but could develop no cash dividend.
The gradual deterioration in performance left it incapable of providing any dividend to shareholders in 2018, triggering it to be put in the Z category.
At present, the company does not have any reserve or surplus.
Each stock of Sunlife Insurance, that includes a paid-up capital of Tk 35.76 crore, traded at Tk 17 yesterday.
On Tuesday, it announced through the DSE that it had been going to liquidate a set asset: selling a bit of land worth Tk 45 crore.
The company's main problem was that it didn't attract clients as required whereas an insurance company's lifeline may be the addition of new clients, said a high official of the business requesting never to be named.
So, its gross premium declined and claim settlements became tough, he said.
The issues intensified when some claim settlements were delayed and it eroded the confidence of its clients, he added.
Contacted, Rubina Hamid, chairperson of Sunlife Insurance, said the insurer has been facing some problems because its costing was high.
"So, some problems arose in claim settlements."
Probed further on this, she said after a particular period after its launch a life insurance coverage company needs to simultaneously settle several claims, resulting in some problems.
Then your global coronavirus pandemic arrived and exacerbated matters. Sunlife's business was troubled like others because claim settlements and arrear withdrawals were handicapped.
"But I think we are able to turn out from the trouble very soon as the economy has began to roll. We've passed the crisis period so we are in a position to bounce back."
On the announcement to liquidate the asset, she said: "We are available the land to liquidate money that might be invested either in a set deposit into banks or the currency markets."
"We think investment into banks, bonds or the stock market would give us a much better return than through the land investment."
The company can be trying to reach home based business segments, like the corporate sector. It initiated some new policies like group insurance and signed business handles microfinance institutions.
"After the deals start making revenue, the problem would change. We desire to turn our business around," she said.
A high official of the Insurance Development and Regulatory Authority said these were yet to get any information from the business over plans for the sale.
"It may have already been decided just recently. They will surely inform us," he said.
Giving an answer to a question, the IDRA official said the business had some problems regarding claim settlements plus some of them were solved by the regulator.
