Profits at Sri Lanka's listed Union Assurance surged 349 percent from a year earlier to 300.2 million rupees in the June 2018 quarter on rising revenue and lower costs, interim results showed.
The company specializes in long term, or life, insurance, reporting earnings of 5.09 rupees a share in the June quarter, interim results filed with the Colombo Stock Exchange showed.
Earnings for the six months to end June 2018 was 10.25 rupees a share on profits of 604 million rupees, up 245 percent from a year earlier. During the premium, gross premium incomes growing 12 percent from a year earlier to 5.2 billion rupees and investment income growing 16 percent to 2 billion rupees.
Union Assurance was trading 3.60 rupees higher on Wednesday at 280 rupees.
In the June quarter, gross written premium income rose 13 percent from a year earlier to 2.6 billion rupees, with reinsurance costs rising 13 percent to 138 million rupees, leading to net written premiums growing 13 percent to 2.5 billion rupees.
Profit from operations grew 495 percent to 278.8 million rupees as net losses from changes to contract liabilities in the life fund fell 53 percent to 1 billion rupees.
Net claims and insurance benefits paid rose 88 percent to 792.2 million rupees and underwriting and acquisition costs grew 37 percent to 542.3 million rupees.
Operating and administrative costs rose 57 percent to 809 million rupees
The company did not report any income tax expenses having carried forward taxable losses from the previous financial year, the company said.
The Inland Revenue Department has raised an income tax assessment of 832 million rupees for the 2015/16 financial year along with a 50 percent fine, which totals 1.3 billion rupees.
"Directors are of the view that it has followed due process and acted in accordance with the prevailing laws in its tax submission and therefore, the above assessments have no rationale or basis in law," the company said in the notes to the interim results.
Union Assurance's life fund was worth 35.4 billion rupees at end June 2018, down from 39.5 billion rupees six months earlier due to the falling value of financial investments to 29.6 billion rupees from 34.5 billion rupees.
Gross assets increased to 44.5 billion rupees at end June 2018, up from 43 billion rupees six months earlier.
Net Assets fell to 11.4 billion rupees from 11.9 billion rupees.