United Insurance profit halves on airport fire claim payouts

United Insurance Company Limited reported a sharp decline in profit in the first quarter (January–March) of the current year, with earnings falling by around 46% due to higher claim settlements.

The information was disclosed yesterday (6 May) through the unaudited financial statements published on the website of the Dhaka Stock Exchange (DSE). Following the disclosure, the company's share price dropped 7.42% to Tk42.40 on the DSE.

According to the report, earnings per share (EPS) stood at Tk0.24 for January–March 2026, compared to Tk0.45 in the same period last year, reflecting a 46% decline.

The company's net profit for the quarter stood at Tk1.07 crore, down from Tk2 crore a year earlier.

The company said two key factors drove the profit decline. First, it had to settle a significantly higher volume of insurance claims during the quarter, increasing overall expenses. Second, income from investments fell compared to the previous year, putting further pressure on earnings.

Khawja Manzer Nadeem, the company's managing director, told TBS that about 15% of total income was spent on claim settlements during the quarter. "Most of these claims were related to a fire incident at the airport. We settled claims for clients including Unilever and others, which impacted our profitability," he said.

He added that business performance was otherwise positive compared to the same period last year, but higher claim payouts led to the overall decline in profit.

The company also reported a deterioration in cash flow. Net operating cash flow per share (NOCFPS) stood at negative Tk2.79 for the quarter, compared to Tk0.11 in the same period last year. The company attributed this to higher cash outflows for claim payments and lower premium collection, which put pressure on operating cash flows.

However, not all indicators were negative. Net asset value (NAV) per share increased slightly to Tk32.11 as of 31 March 2026, up from Tk31.04 as of 31 December 2025.

The company has recommended a 15% cash dividend for the year ended 2025. Its annual EPS stood at Tk3.46, compared to Tk2.26 in the previous year.

Established in 1985, United Insurance Company Limited is one of the first-generation non-life insurance companies in Bangladesh. It was listed on the stock market in 1990 and offers a range of general insurance services, including motor, fire, marine and health coverage.

The company was initially associated with the UK-based Camellia Group and is now affiliated with one of the country's leading conglomerates, United Group. It is known for its strong financial base, stable underwriting and efficient claims management.

Market analysts say the performance of insurance companies largely depends on claim expenses and investment income. In the case of United Insurance, higher claim payouts have temporarily weighed on earnings. However, profitability may recover if claim expenses normalise and investment income improves in the coming quarters.