Express Insurance's profit plunges to 3-year low on shrinking marine business

Profit of Express Insurance Ltd hit a three-year low in 2022 mainly due to a significant fall in its premium income from the marine segment as import fell.
The general insurer reported a profit of Tk 86.71 million for 2022, the lowest since 2019. The 2022 profit was also 32 per cent lower compared to the previous year.
As a result, the company's earnings per share went down to Tk 1.33 for 2022 from Tk 1.86 the year before, according to a regulatory filing.
The company's first quarter profit also sank 38 per cent year-on-year to Tk 26 million for January-March this year for the same reasons.
EPS stood at Tk 0.40 for the January-March quarter, down from Tk 0.65 for the same period of the previous year.
Company secretary Md Mohiuddin Khondaker said profit had declined largely due to a decrease in gross premium income, particularly from the marine segment, as imports slumped for the dollar crisis.
The company's gross premium slid more than 7 per cent to Tk 570 million in 2022.
Marine insurance business has been hit hard as the opening of the letters of credit (LCs) is reduced in coping with the depletion of the foreign exchange reserves.
Marine insurance business fell drastically, particularly in the last nine months of 2022.
Overall LC opening slumped 14 per cent year-on-year in July-December of the current financial year while LC opening for capital machinery nosedived 65 per cent during the period.
In fact, overall business activities in the country have been enduring a squeeze because of the global financial crisis, which impacted the company's income too, said Mr Khondaker.
Lower income from the stock market investments caused the company to bleed more, said Mr Khondaker.
In Bangladesh, general insurance companies do business mainly in three segments -- fire, transport and marine segments.
Meanwhile, the board of the company has declared 7 per cent cash dividend for shareholders for 2022. It will hold the annual general meeting (AGM) on August 28. The record date is July 24.
Most of the insurers' profit dropped significantly in 2022 because of the Russian-Ukraine war as the conflict forced the government to curb imports to save dollars.
A big blow came from a sharp fall in automobile insurance as third-party insurance has become largely non-existent in the country.
Third-party insurance is a policy purchased by the insured from the insurer for the protection against the claims of the third party. But in Bangladesh, no one buys third-party insurance products since it is not mandatory under the existing Road Transport Act 2018.
The government is set to re-introduce motor vehicle insurance from next month, which will create an opportunity for some earnings in this segment, said the company secretary.
STOCK PERFORMANCE
Remaining flat in the past two months on the Dhaka Stock Exchange to the first week of May, the stock soared 37 per cent in the last three weeks of the month to reach Tk 33.
It failed to keep the momentum and gradually fell to Tk 27.90 on Monday.
Following the earnings disclosure on the DSE website, the stock price plunged 4.30 per cent further to close at Tk 26.70 on Tuesday.

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