Great Eastern's net profit crashes 90% to $33.9m in Q1

Total weighted sales rose due to growth momentum in Singapore and Malaysia.

Great Eastern's net profit plunged 90% YoY to $33.9m in Q1, from $342.7m in 2019, the company announced. This is attributed to the lower valuation of investments arising from unfavourable financial market conditions.

Meanwhile, total weighted new sales jumped 21% YoY to $298.8m over the same period, attributable to the growth momentum in Singapore and Malaysia operations.

Correspondingly, the group’s new business embedded value (NBEV) increased by 15% YoY to $126.1m in Q1 compared to $109.8m in the previous year. Operating profit also doubled YoY to $298.6m over the same period from $148.7m.

This growth is said to be due to improved contribution of core markets and reduction in insurance contract liabilities in both Singapore and Malaysia. The capital adequacy ratios of the group’s insurance subsidiaries in both countries also remained above their respective minimum regulatory levels.

However, Great Eastern registered a non-operating loss of $222.8m in Q1, reversing the $75.9m profit in Q1 2019, due to mark-to-market losses offset by reduction in insurance contract liabilities in Singapore. Loss from shareholders’ fund also amounted to $41.9m from a $124.2m gain over the same period.

According to the group’s CEO, Khor Hock Seng, the company’s digital and technology helped cushion the impact of the COVID-19 and offer alternatives to the traditional face-to-face interactions with customers. The group will also continue to monitor market developments closely to assess the level of dividend payment.