OREANDA-NEWS. April 15, 2015. In the last quarter of 2014, growth in the finance & insurance sector measured 10.3% year-on-year and 36.2% on a quarter-on-quarter seasonally-adjusted annualised basis. By both measures, this was the highest growth clocked for the services-producing industries, as shown in the MTI report – click here. The Ministry of Trade & Industry noted that the sector’s growth was supported mainly by the fund management and insurance segments.

Insurance is one of the four industries represented by the Financials sector, according to the Global Industry Classification Standard (GICS®). This industry can be further broken down to five sub-industries – Insurance Brokers, Life & Health Insurance, Multi-line Insurance, Property & Casualty Insurance and Reinsurance.

Great Eastern Holdings is the largest actively traded insurance stock listed on the Singapore Exchange (SGX) – it is a clear sector leader, representing 95% of the combined market capitalisation of the four stocks. The company is categorised to the Life and Health Insurance sub-industry, providing primarily life, disability, indemnity or supplemental health insurance.

The four insurance stocks listed on SGX – Great Eastern Holdings, United Overseas Insurance, Singapore Reinsurance Corporation, and SHC Capital Asia – have a combined market capitalisation of S\\$12.3 billion. Together, the four insurance stocks have averaged a 7.2% year-to-date total return, bringing their average one-year total return to 41.3% and three-year total average return to 66.2%. Note SGX also hosts a secondary listing of Prudential PLC.

Taking into account currency effects, this is in line with the MSCI World Insurance Index’s gain of about 4.5% in the year thus far.

Upcoming Corporate Activity

The three largest capitalised insurance stocks – Great Eastern Holdings, United Overseas Insurance and Singapore Reinsurance Corporation – have a history of distributing dividends semi-annually. Shares in the three stocks will go ex-dividend in the next two weeks. Details are below:

  • Great Eastern Holdings will go ex-dividend on 21 April 2015, distributing 45 cents per share (S\\$0.40 + S\\$0.05) per share in dividends.
  • United Overseas Insurance will go ex-dividend on 29 April 2015, distributing 14 cents per share (S\\$0.12 + S\\$0.02) per share in dividends.
  • Singapore Reinsurance Corporation will also go ex-dividend on 29 April 2015, distributing 0.8 cents per share in dividends.

Details of the four Insurance companies are listed below. Note also that clicking directly on the stock name below will take you to the relevant profile page on SGX StockFacts.

Source: SGX StockFacts (Data as of 14 April 2015), *listed on the Catalist Board **note does not take into account interim special cash dividend

Source: SGX StockFacts (Data as of 14 April 2015), *listed on the Catalist Board

Great Eastern Holdings

Great Eastern Holdings provides financial advisory services and insurance products in Singapore, Malaysia, and other Asian countries. It operates through Life Assurance, General Assurance, and Shareholders segments. The company was founded in 1908 and is based in Singapore. Great Eastern Holdings is a subsidiary of Oversea-Chinese Banking Corporation Limited.

Great Eastern Holdings is the largest insurance company listed on SGX with a market capitalisation of S\\$11,709.9 million. The stock trades at a price-to-earnings ratio of 13.3 and price-to-book value of 2.0. the five substantial shareholders are Oversea-Chinese Banking Corporation, Colonial First State Asset Management (Australia), Wong Hong Sun, Kuchai Development Bhd and Yen Wong Hong.

On 14 April 2015, Great Eastern Holdings announced that its wholly-owned subsidiaries, The Great Eastern Life Assurance Company, The Overseas Assurance Corporation and The Great Eastern Trust Private Limited have each sold part of their respective stakes in New China Life Insurance Company. The profit attributable to shareholders from the sale amounts to approximately S\\$123 million (click here to read more). Great Eastern Holdings will also be announcing its financial results for the first quarter ended 31 March 2015 on Friday, 24 April 2015, before the trading market opens.

The company website is: www.greateasternlife.com.                                                                 

United Overseas Insurance

United Overseas Insurance is engaged in the underwriting of general insurance and reinsurance in Singapore, ASEAN countries, and internationally. The company offers personal insurance products that include travel, personal accident, home protection, foreign domestic worker, and motor insurance products. The company was founded in 1971 and is based in Singapore. United Overseas Insurance is a subsidiary of United Overseas Bank Limited.

United Overseas Insurance has a market capitalisation of S\\$297.2 million. The stock trades at a price-to-earnings ratio of 10.5 and price-to-book value of 1.0. The five substantial shareholders are United Overseas Bank, Ng Poh Cheng, Chong Chew Lim, Seng Chen Siong and India International Insurance Pte Ltd.

On 11 February 2015, United Overseas Insurance announced its profit before tax for the year ended 31 December 2015 increased by 9.2% to S\\$33.4 million (click here to view more). The company will announce its first quarter 2015 financial results on 28 April 2015 (click here to view more).

The company website is: www.uoi.com.sg.

Singapore Reinsurance Corporation

Singapore Reinsurance Corporation operates as a general reinsurance company in Singapore and other Asian countries. It operates in two segments, Reinsurance and Non-Reinsurance. The company was founded in 1973 and is headquartered in Singapore.

Singapore Reinsurance Corporation has a market capitalisation of S\\$187.6 million. The stock trades at a price-to-earnings ratio of 10.4 and price-to-book value of 0.8. The five substantial shareholders are Hamblin Watsa Investment Counsel, Lion Global Investors, United Overseas Bank, India International Insurance Pte Ltd, and KIM Eng Holdings.

On 31 December 2014, Singapore Reinsurance Corporation reported their revenue for the year ended 31 December 2014, increased by 4.3% to S\\$153.6 million. The company attributed the increase to higher premiums reported by some cedants (click here to view more).

The company website is: www.singre.com.sg.

SHC Capital Asia

SHC Capital Asia underwrites various classes of general insurance products for individuals and small to medium sized enterprises in Singapore. The company was founded in 1956 and is based in Singapore. SHC Capital Asia is a subsidiary of SHC Capital Holdings Pte Ltd.

SHC Capital Asia has a market capitalisation of S\\$81.1 million. The stock trades at a price-to-earnings ratio of 19.4 and a price-to-book value of 1.4. The five substantial shareholders are See Hoy Chan Sdn Berhad Group, Lee Chue Chye, Tay Eng Hoe, Wong Juat Jiong, and Lam Soon Realty (Pte) Ltd.

As footnoted in the first table above, SHC Capital Asia announced a special dividend following the completion of the proposed disposal of the entire issued and paid-up share capital of SHC Insurance Pte. Limited. The Board declared an interim special dividend of 12 Singapore cents per share that went ex-dividend on 8 August 2014. 

On 27 March 2015, SHC Capital Asia announced that it has entered into a non-binding memorandum of understanding with CUIKS Limited, MENGGS Limited, LILC Limited, Jongkol Trakulyingcharoen, Flourishing Profits Venture Limited, Hong Liang and Teoh Sew Hock to acquire 100% equity interest in Tong Da Medical Device Limited for a purchase consideration of approximately S\\$120 million (click here to view more).             

The company website is: www.shccapitalasia.com.