Neco Insurance Profit falls despite increase in Premium collection
INVESTOPAPER
Neco Insurance has reported a slight decline in profit until the second quarter of the fiscal year 2076/77. The insurance posted a profit of Rs. 16.48 crores, a 3 percent decline from the same period of the previous year. The company had earned Rs. 17.03 crores in net profit in the first six months of fiscal year 2075/76.
The profit has declined despite an 18 percent increase in the premium income. This is mainly due to the increase in provision for the unexpired risks. Neco insurance has Rs. 81.65 crores as provision for the unexpired risks. Such provision stood at Rs. 69.62 crores in the same period of the previous year.
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The total premium collection increased to Rs. 115.71 crores from Rs. 97.97 crores in the last year the same period. Likewise, the net premium income has increased to Rs. 70.99 crores, a rise of almost 18 percent from Rs. 60.31 crores.
In the first six months, Neco Insurance paid a net claim of Rs. 25.85 crores, a 7 percent increment from the corresponding period last year. Similarly, the total outstanding claim stands at Rs. 40.37 crores.
The insurance has a current capital of Rs. 131.74 crores, a rise of 12 percent due to the issue of the bonus share. The reserve and surplus and the insurance fund stand at Rs. 39.67 crores and Rs. 68.98 crores respectively.
In per-share ratios, Earnings Per Share (EPS) and Net worth Per Share is at Rs. 25.01 and Rs. 187.42 respectively.
The performance in second-quarter is summarized in the table below:
Neco Insurance Second Quarter Report Summary, FY 2076/77
| HEADINGS | 2nd QTR, 2076/77 | 2nd QTR, 2075/76 | PERCENT CHANGE |
| Paid-up Capital (Rs. ‘crores’) | 131.74 | 117.63 | 12.00 |
| Reserve & Surplus (Rs. ‘crores’) | 39.67 | 38.57 | 2.85 |
| Insurance Fund (Rs. ‘crores’) | 68.98 | 52.08 | 32.45 |
| Total Investments (Rs. ‘crores’) | 304.75 | 266.67 | 14.28 |
| Total Premium (Rs. ‘crores’) | 115.71 | 97.97 | 18.11 |
| Net Premium (Rs. ‘crores’) | 70.99 | 60.31 | 17.71 |
| Net Claim (Rs. ‘crores’) | 25.85 | 24.12 | 7.17 |
| Total Outstanding Claim (Rs. ‘crores’) | 40.37 | 32.88 | 22.78 |
| Net Profit (Rs. ‘crores’) | 16.48 | 17.03 | -3.23 |
| Earnings Per Share (Rs.) | 25.01 | ||
| Networth Per Share (Rs.) | 187.42 | ||
| Market Price Per Share (Rs.) [Poush end, 2076] | 420 | ||
| P/E Ratio | 16.79 |
Note:
The above figures are based on the unaudited second-quarter report published by the respective company. Investors are advised to take other things into consideration along with this report while making investment decisions. The numbers may vary after the final audit.
Note: The share price, as well as the P/E ratio, is based on the data of Poush end, 2076. At current, the numbers may vary.
