International experts recorded that the global insurance market operates in the larger macroeconomic environment and is subject to an environment where interest rates remain low over the long term. Such a low-for-long environment may not only directly hurt the profitability and solvency of insurers, but also raise the probability of a reassessment of risk premia (spreads), resulting in an abrupt spike in interest rates. The interest rate risk to which an insurer is exposed is connected to its asset-liability mismatch risk, mainly in companies offering long-term guaranteed rates on their products.
The impact on the insurance industry was noticeable: in 2020, premium growth slowed to approximately 1.2 percent (compared with more than 4 percent per year between 2010 and 2020). Statistics showed that profits declined by about 15 percent from 2019.
The fall was sharpest in Asia–Pacific (down 36 percent) and was mainly driven by declining profits in life. Preliminary data suggest that premium growth and profits rebounded in 2021, mainly in regions where strong vaccine rollouts have made many activities possible again, at least periodically. In 2021 insured losses from natural catastrophes totaled $130 billion, 76 percent above the 21st century average, and 18 percent higher than 2020, according to the 2021 Weather, Climate and Catastrophe Insight report from Aon. Hurricane Ida was the largest insured loss event in 2021 and the fourth costliest hurricane on record with $36 billion in insured losses.
Furthermore, there were 20 billion-dollar insured loss events in 2021, the fourth highest on record. Insured losses of $17 billion from winter weather, was the costliest on record for this peril. The $13 billion insured losses from European floods was the costliest disaster on record for the continent. Noted that roughly 38 percent of global economic losses were covered by insurance, translating to a protection gap of 62 percent.
In the developing countries like Pakistan, EFU General Insurance Limited is Pakistan’s largest and oldest general insurance company, always ready to go the extra mile to serve better, it is said by the experts of EFU insurance in the financial statement. EFU General offers broad range of insurance service to complete all needs of commercial or individual clients. EFU also offers fire, engineering, marine, aviation, motor, miscellaneous services and Takaful covers.
The experts of EFU also recorded that EFU has a diversified customer base and writes all classes of industrial, commercial risks and caters to retail business like travel insurance, vehicle insurance, etc. presently the financial experts of EFU general insurance presented the unaudited financial statements for the three months period closed 31 March 2022.
Performance Review the written premium for the quarter grew by 13 percent to Rs. 6,804 million (including Takaful Contribution of Rs.689 million) from Rs. 6,022 million (including Takaful Contribution of Rs.712 million) for the same quarter of last year. Statistics in the financial report of EFU showed that the net premium revenue was Rs. 2,557 million as compared to Rs. 2,382 million for the same quarter of last year. The overall claims ratio to net premium revenue was also registered 47 percent as against to 40 percent for the same quarter of previous year. Investment income (including rental income, profit on deposits, and other income) for the quarter was registered to Rs. 902 million as against to Rs. 907 million for the same quarter of last year.
It is also said that EFU General is the most powerful trusted brand in Pakistan and is the leading insurer of Chinese infrastructure projects (CPEC) in the country. It has always played a chief role of institution, giving the country insurance industry the leadership, manpower and drive needed to grow and face challenges. EFU General Insurance Ltd. has built a diversified customer base, covered more sorts of risks than any other, improve the expertise and delivered on the promises.
In the year 2017 EFU General Insurance Ltd. counting its Takaful (Islamic Insurance) operations has crossed the Premium/Contribution figure of Rs.20 billion. It is the first general insurance company in the history of Pakistan to attain this milestone. The Experts also recorded that the after-tax profit for the quarter was Rs. 909 million as against to Rs. 999 million in the same quarter last year. EPS (earnings per share) for the quarter was Rs.4.55 as against to Rs. 4.99 in the same quarter of previous year. EFU General Insurance Ltd. rated by national and international rating agencies. i.e., VIS, PACRA of Pakistan and AM Best of USA. VIS and PACRA have assigned rating of AA+ with outlook stable and AM Best have assigned rating of B+ with outlook stable.