The net profit of Great Eastern Holdings has taken a 90% year-on-year tumble for the first quarter of 2020, according to the company’s financial results statement.
The insurer, which is the insurance arm of OCBC Bank, reported net earnings of SG$33.9 million for the first quarter of 2020, down from SG$342.7 million during the same period last year. Its operating profit more than doubled, from SG$148.7 million to SG$298.6 million, however, this was negated by investment losses due to unfavourable financial market conditions arising from the global COVID-19 outbreak,
Total weighted new sales grew by 21% to SG$298.8 million, while new business embedded value grew 15% during the quarter. This was attributed by the group to growth in Singapore and Malaysia, mostly fuelled by the agency channels in both countries, as well as the bancassurance channel in Singapore.
According to Great Eastern, the Capital Adequacy Ratios of its insurance operations in both Singapore and Malaysia remain strong and well above their respective minimum regulatory levels.
“The onset of the COVID-19 outbreak has delivered many challenges globally in Q1-20 and will continue for a period of time,” said Great Eastern CEO Khor Hock Seng. “While the group’s profit was impacted by the volatility in the global financial markets during the quarter, our investment portfolio remains sound and our capital position also remains strong. We expect our new business activity to be dampened as a result of weakened demand and restricted face-to-face interactions. The major digital and technology infrastructure initiatives that we have embarked on in the past two years have helped the company to cushion the impact of the COVID-19 situation.”