BERJAYA GROUP BERHAD - Berjaya Corporation Berhad

26
CEO’s Review Of Operations
GENERAL INSURANCE
BERJAYA
GENERAL
INSURANCE’S
RECEPTION
AREA.
During the year, Berjaya General Insurance
Berhad’s gross written premium grew by 7%
from RM172.7 million to RM184.8 million
while net written premium increased by
RM22.3 million from RM81.3 million to
RM103.6 million. This increase reflected an
improvement in the retention ratio of 9% from
47.1% to 56.1% which is in line with the
company’s continuous effort to maximize
domestic retention as advocated by Bank
Negara Malaysia.
share of 13%. Total gross revenue premium
increased by 34% to RM448.8 million.
However, profit before tax declined to RM5
million from RM27 million, mainly due to
losses from equity investments.
The agency force continued to grow and
recorded a 28% increase over the previous year,
bringing the total number to 6,300 as at April
1998. Our agents’ productivity remains the
highest in the industry.
The financial year under review also recorded a
change-over at the helm of the company when
its long serving Chief Executive Officer, Allen
Ho, retired after 30 years of dedicated service
to the company. Many of the company’s
achievements were the result of the strong
foundation built by Allen. One of his most
enduring legacies is the strong team he left
behind, now under the new Chief Executive
Officer, Ng Keng Hooi. The Board is confident
that the company will continue to grow from
strength to strength under the leadership of Ng
Keng Hooi.
Although the continued sluggish market
sentiments and slowdown in the Malaysian
economy will continue to plague business
growth, Berjaya Prudential is expecting
further growth next year through aggressive
recruitment of insurance agents and a prudent
management style.
Berjaya General Insurance recorded a lower
underwriting profit of RM6.2 million compared
to RM9.6 million achieved in the previous year.
This was due to a deterioration in the overall
claims ratio from 58.6% to 70.7%. Despite
several major claims, the company’s fire
insurance business continued to be the best
performer followed closely by marine
insurance. Together with investment and other
income before accounting for investments in
quoted equities, the company registered a
profit of RM25.1 million compared to RM21.2
million in the previous year. However, after
accounting for losses arising from the disposal
of quoted investments and provision for
diminution in value of investments amounting
to RM28.2 million and RM33.6
million respectively, the
company registered a
total operating loss of
RM36.7 million compared
to an operating profit
before taxation of RM66.9
million achieved last year.
Since the implementation of
the Insurance Act 1996 on
1 January 1997, Berjaya
General Insurance has taken
the necessary steps to ensure
full compliance of the requirements in the Act.
Notwithstanding the operating loss and the
increase in margin of solvency to RM25 million