Great Eastern's Q4 Profit Falls 14% Amid Market Volatility

Great Eastern Holdings Limited, a leading insurance provider in Singapore and Malaysia, reported a 14% decline in its Q4 profit to S$134.8 million. The company attributed this decline to the challenging global investment climate and the negative impact of financial market movements on the valuation of insurance contract liabilities in its Singapore Non-Participating business. Despite this setback, Great Eastern's core business fundamentals remain strong, with New Business Embedded Value (NBEV) and Operating Profit from Insurance Business registering positive growth momentum.

Great Eastern's NBEV grew by 9% year-on-year to S$874.8 million in FY-22, reflecting a shift in product mix and higher NBEV margins. This growth is significant, considering the challenging global investment climate during the year. In comparison, Manulife Financial Corporation, an industry peer, experienced a 40% collapse in net profits in 1QFY2021 due to "noise," highlighting the resilience of Great Eastern's NBEV growth.



Great Eastern's Operating Profit from Insurance Business registered a healthy growth of 7% for the year in FY-22. This growth indicates the strength of the company's core insurance business, despite the volatility in global financial markets. While the specific growth rate for industry peers is not mentioned, Great Eastern's 7% growth in operating profit is a positive sign, especially considering the broader economic challenges.

To mitigate risks and navigate market fluctuations, Great Eastern has employed several strategies, such as diversification, active management, risk management, and participating products. The company's strong capital position and sound investment portfolio have helped it maintain resilience in the face of global financial market volatility.

In conclusion, Great Eastern's Q4 profit decline is primarily driven by temporary factors related to market conditions. The company's core business fundamentals, such as NBEV and Operating Profit from Insurance Business, have shown positive growth momentum, outperforming industry peers in the face of challenging market conditions. Great Eastern's strong capital position and risk mitigation strategies position it well to recover and continue growing in the long term.