Green Delta Insurance, the country's industry leader in the general insurance category, has reported its highest growth in profit for the last five years.
The key driver of the growth is a decrease in agency costs and expenses in both claims and management.
The company – which manages fire, marine, motor, and miscellaneous insurance – posted the year-on-year 122% increase in profit after taxes.
The net asset value (NAV) and net operating cash flow per share have also increased significantly.
As its profit has risen, the board of directors has recommended a 32% dividend – 24.5% in cash and 7.5% in stock – for the company's shareholders.
The company – which was listed on the capital market in 1989 – set 8 March as the record date to fix shareholders for dividends, and 30 March 2021 for the annual general meeting.
Owing to the increased profit and dividends compared to the previous year, Green Delta's share price rose by 6.87% to Tk60.70, from Tk56.80, on Monday.
At the end of 2020, the company posted a profit of Tk66.72 crore, while the earnings per share (EPS) stood at Tk7.16.
In the previous year, its net profit was Tk30.07 crore and EPS Tk3.23, and the shareholders received a 20% dividend, of which 15% was in cash and 5% in stocks.
The EPS increased by Tk3.93 compared to the previous year.
Green Delta attributed the profit growth to the 34% reduction in its agency costs, a 31% decrease in insurance claim expenses and an 18% drop in management expenses.
Previously, in 2019, the finance ministry issued a notification limiting the management cost of insurance companies.
As of January this year, sponsors and directors held 33.80% of the insurance company's nearly 9.32 crore shares, while institutional investors held 20.36%, foreign investors held 8%, and general investors held 37.84%.