Great Eastern Q3 profit falls 26% to $213.3 million on adverse market conditions

SINGAPORE (THE BUSINESS TIMES) – Great Eastern Holdings on Tuesday (Nov 2) posted a 26 per cent fall in net profit to $213.3 million for the third quarter ended Sept 30, from $287.9 million a year ago.

The insurance arm of OCBC said this was mainly because the financial market conditions were not as favourable for third quarter 2021 and resulted in mark-to-market losses.

Meanwhile, operating profit rose 46 per cent to $248.7 million, from $170.2 million a year earlier, in line with higher profits from the insurance business.

However, non-operating profit came in at a loss of $4.6 million for the third quarter, slumping down from a profit of $51.2 million in the preceding year.

Profit from shareholders’ fund fell to a loss of $28.4 million, from a profit of $74.9 million a year ago, due to mark-to-market losses in equities and collective investment schemes, the insurer noted.

Despite the negative impact caused by Covid-19 on sales in Malaysia and Indonesia, a strong momentum for the business in Singapore led to a 29 per cent growth in total weighted new sales to $555.2 million, from $432.8 million last year.

The sustainable total weighted new sales performance was underpinned by the successful execution of the group’s distribution, product and digital strategies, the insurer noted.

In addition, lower margins in Singapore also led to new business embedded value edging up 3 per cent to $177.1 million, from $171.3 million in the corresponding period last year.

Great Eastern group chief executive Khor Hock Seng pointed out that the group has continued to build on the momentum from the past nine months to achieve robust growth in total weighted new sales and new business embedded value for the year thus far.

He said: “Our priority remains to build resiliency into our businesses amid current and evolving Covid-19 challenges. This would entail delivering the right solutions to meet the needs of our customers, leveraging on our comprehensive suite of products, strengthening our distribution capabilities as well as sharpening our digital solutions and services.”

“We will stay the course as we pursue a disciplined strategy to grow our franchise across our key markets in an increasingly uncertain and competitive business environment,” Mr Khor added.

Great Eastern shares closed up 1.8 per cent, or 39 cents, at $21.91 on Monday.

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