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THE weak
investment environment has put a dent on the
first-quarter profit of listed National Reinsurance
Corp. of the Philippines (PhilNaRe) as it reported a
37-percent drop in net income to P110 million from P174
million in the same period a year ago.
The
company, in a report to the stock exchange Wednesday,
said the decline in earnings came even as underwriting
income surged 189 percent from January to March this
year.
“The
strong performance of the company’s reinsurance
operations was not enough to offset lackluster results
from investment operations,” said senior vice president
and chief finance officer John E. Huang.
He said
the challenging investment environment was a major drag
on the performance of their investment portfolio. “At
this time last year, the stock market was moving up and
so was the peso, and interest rates were trending down.
This year we have the exact opposite. Add to that
volatile international markets and you have a situation
with limited trading opportunities,” Huang explained.
PhilNaRe’s net investment income in the first quarter
amounted to P86 million, down from P187 million in the
same period in 2007.
Its
reinsurance premiums during the period rose slightly to
P726 million from P723 million in the first quarter last
year. Net underwriting income for the first quarter of
2008 also increased to P111 million from P38 million the
previous year as its increased capitalization allowed it
to retain more reinsurance premiums for its own account.
As of March 31 this year, PhilNaRe’s total resources
stood at P11.2 billion, while stockholders’ equity
reached P6.6 billion.
The
company, which went public in April 2007, was
incorporated in 1978 pursuant to Presidential Decree
1270 as a domestic professional reinsurance firm to
provide life and nonlife reinsurance. |
