SINGAPORE (May 12): United Overseas Insurance (UOI) reported a 67.5% plunge in 1Q2020 earnings ended March to $3.7 million from a year ago. While gross premium was largely similar, net claims surged.

Gross premium increased 0.6% to $28 million with an increase seen across all classes except fire, motor, and marine cargo.

Net earned premium consequently increased 3.2% to $10.8 million while net claims incurred increased surged 40.8% to $4.4 million.

UOI also saw net commission income dip 0.7% to $1.9 million.

After deducting management expenses, 1Q2020 underwriting profit came in 17.4% lower at $4.8 million.

Profit before tax dived 67.4% to $4.4 million from last year’s $13.6 million, after non-underwriting income booked a loss of $0.4 million. In the same period last year, UOI recorded profit of $7.7 million, which was boosted by a one-off gain of $6.6 million from unit trusts.

Net of tax recorded an unrealised loss of $22.7 million instead of an unrealised income of $8.9 million in the corresponding period last year, as global markets took a nosedive since late February on the back of the pandemic.

Overall, total comprehensive income decreased by $39.3 million or 193.5% y-o-y mainly on negative investment results.

In its outlook statement, UOI says premium growth will be a challenge domestically and overseas owing to the Covid-19 pandemic and potential global recession.

It also expects worsening claims arising from extreme climate change, an increase in statutory limits for work injury compensations, the ongoing Covid-19 outbreak, and adverse economic conditions.

UOI says it will continue to relook at its investment strategies and asset allocation to minimise the volatility owing to the different global conditions.

UOI shares closed 18 cents lower, or 2.7% down, at $6.50 on Tuesday, prior to the announcement.