Softlogic Life Insurance : Quarterly Financial Report as at 31st December 2021

INTERIM FINANCIAL STATEMENTS - FOR THE PERIOD ENDED 31ST DECEMBER 2021

Dear Shareholders

Softlogic Life Insurance PLC recorded a superior performance in a pandemic impacted business landscape, posting Gross Written Premium (GWP) of Rs. 20,053 million for the year ended 31 December 2021 with an increase in top-line growth of 28% compared to the corresponding period of the previous year. The increase in GWP of 4,393 million is the highest recorded by any Company in the Life Insurance Industry for the financial year. Profit after tax (PAT) for the financial year 2021 rose by Rs. 583 million, an increase of 38% YoY. The PAT includes Rs. 232 million one off deferred tax asset reversal due to the tax rate change from 28% to 24% announced at the beginning of 2021. Excluding this one-off item, the Company recorded PAT of 2,337 million. Profit before tax (PBT) grew by 39% compared to last year at Rs. 2,130 million.

Continuing its strong growth momentum following 25% growth in 2020 -the first year of the pandemic, 25% in 2019 -the year that was marred by the Easter attacks, the Company reported a 10-year Compound Annual Growth Rate (CAGR) of 29% of GWP, versus estimated industry 10-year GWP CAGR growth of 13.5%.

Amidst the challenges posed by the pandemic and disruptions to the usual way of life, the Company performed strongly being ranked as the third-largest life insurance company in Sri Lanka growing estimated market share further to 16% by the end of the year 2021.

The Company has immensely benefited from its diverse distribution channels and modern insurance products that now cover over 2 million Sri Lankan lives whilst using technology to the fullest to power its operations and deliver unparalleled service to policyholders.

The deferred tax adjusted Return on Equity was reported at 23.2% compared to 21.3% in the previous period and recurring return on equity is 25.8% for 2021.The Recurring Earning per share was Rs. 6.23 per share for 2021 compared with Rs. 4.06 per share in 2020. The Company's operating expense ratio decreased to 19%, where it stood at 22% a year ago due to prudent and efficient expense management initiatives adopted. As at 31 December 2021, Softlogic Life maintained a healthy Capital Adequacy Ratio (CAR) of 395%, well above the regulatory CAR requirement of 120%.

The financial investments of the Company grew by 25% from the figures reported at the financial year end 2020 and it was the main contributor to increase the total assets base of the Company by Rs.6,138 million during the period under review. Meanwhile, the Company's insurance contract liabilities recorded a growth of 23% from the level reported at the end of 2020.

The pandemic has been a true test for Softlogic Life to showcase resilience and the effectiveness of our strategies, responsiveness, and innovation. Most importantly our commitment to deliver on claims which is that "moment of truth" for any policyholder. The Company continues to track its claim settlements on a weekly basis thereby ensuring that more than 85% of claims are paid in one single day. The Company paid 6.4Billion gross claims that included 1.1Billion in COVID 19 related Health and Death claims during the year.

As a testimonial to accountability and transparency, the dynamic young company dominated CA Sri Lanka's 56th Annual Report Awards, with a sweeping win of six major awards including Silver Award for Overall Excellence in Annual Financial Reporting beating the country's giant conglomerates who have thus far dominated the top positions for years and years. Further the company clinched the Overall Gold Trophy for its Annual Report, themed 'One Lankan' including three more awards at CMA Integrated Reporting awards ceremony.

The insurance business has now been set up in a robust and scalable manner enabling this unique business model to be implemented in overseas markets that have immense potential. Initiatives in Bangladesh and the Far East are now being pursued.

Sgd.

Ashok Pathirage

Chairman

09th February 2022

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SOFTLOGIC LIFE INSURANCE PLC

INCOME STATEMENT

	For the year ended 31 December	Note	2021	2020	Change
			Rs. ' 000		Rs. ' 000	%
			Un-audited		Audited
	Gross written premiums	5	20,053,302		15,660,116	28
	Premiums ceded to reinsurers		(1,857,795)		(1,872,616)	(1)
	Net earned premiums		18,195,507		13,787,500	32
	Other revenue
	Net finance income		2,355,097		1,634,453	44
	Net realised gains		392,206		171,253	129
	Net fair value gains		7,560		464,044	(98)
	Other operating income		20,766		6,364	226
	Total other revenue		2,775,629		2,276,114	22
	Total net revenue	6	20,971,136		16,063,614	31
	Net benefits, claims and expenses
	Net insurance benefits and claims paid		(5,965,164)		(3,545,807)	68
	Net change in insurance claims outstanding		63,096		(20,990)	(401)
	Change in insurance contracts liabilities		(4,143,426)		(3,599,969)	15
	Underwriting and net acquisition cost (Net of reinsurance)		(4,050,033)		(3,269,454)	24
	Other operating and administration expenses		(3,726,366)		(3,324,870)	12
	Finance cost		(183,569)		(172,177)	7
	Total benefits, claims and expenses		(18,005,462)		(13,933,267)	29
	Profit before tax	7	2,965,674		2,130,347	39
	Income tax expenses	8	(860,806)		(608,864)	41
	Profit for the period		2,104,868		1,521,483	38
	Profit attributable to;
	Owners of the Company		2,104,868		1,521,483
	Non controlling interest		-		-
			2,104,868		1,521,483	38
	Earnings per share
	Basic earnings per share (Rs.)	16	5.61	4.06	38
	Diluted earnings per share (Rs.)	16	5.61		4.06	38

The Notes form an integral part of these Interim Financial Statements.

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SOFTLOGIC LIFE INSURANCE PLC

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December	2021	2020	Change
	Rs. ' 000	Rs. ' 000	%
	Un-audited	Audited
Profit for the period	2,104,868	1,521,483	38
Other comprehensive income
Items that will not be reclassified to income statement
Equity investments at FVOCI - net change in fair value	(127,603)	(235,618)
Equity investments at FVOCI - net change in fair value - Life fund	(27,637)	125,442
Re-measurement gains / (losses) on defined benefit liabilities	(10,102)	4,648
Revaluation of Land and Building	37,025	-
Related tax / deferred tax	-	-
	(128,317)	(105,528)	22

Items that are or may be reclassified subsequently to income statement

Debt investments at FVOCI - net change in fair value

Debt investments at FVOCI - net change in fair value - Life fund Debt investments at FVOCI - reclassified to income statement

Related tax / deferred tax

(43,380)	31,221
(348,601)	255,885
5,113	14,267
-	-

		(386,868)	301,373	(228)
	Total other comprehensive income for the period, net of tax	(515,185)	195,845	(363)
	Total comprehensive income for the period, net of tax	1,589,683	1,717,328	(7)
	Total comprehensive income attributable to:
	Owners of the Company	1,589,683	1,717,328
	Non - controlling interests	-	-
		1,589,683	1,717,328	(7)

The Notes form an integral part of these Interim Financial Statements.

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SOFTLOGIC LIFE INSURANCE PLC

INCOME STATEMENT

	For the three months ended 31 December	2021	2020	Change
		Rs. ' 000	Rs. ' 000	%
		Un-audited	Audited
	Gross written premiums	5,720,538	4,768,212	20
	Premiums ceded to reinsurers	(491,519)	(476,438)	3
	Net earned premiums	5,229,019	4,291,774	22
	Other revenue
	Net finance income	660,125	503,397	31
	Net realised gains	123,272	22,862	439
	Net fair value gains	17,306	13,899	25
	Other operating income	3,305	2,436	36
	Total other revenue	804,008	542,594	48
	Total net revenue	6,033,027	4,834,368	25
	Net benefits, claims and expenses
	Net insurance benefits and claims paid	(1,915,434)	(1,017,626)	88
	Net change in insurance claims outstanding	49,757	(28,846)	(272)
	Change in insurance contracts liabilities	(1,097,777)	(593,346)	85
	Underwriting and net acquisition cost (Net of reinsurance)	(969,275)	(839,749)	15
	Other operating and administration expenses	(1,113,422)	(973,652)	14
	Finance cost	(94,335)	(37,874)	149
	Total benefits, claims and expenses	(5,140,486)	(3,491,093)	47
	Profit before tax	892,541	1,343,275	(34)
	Income tax expenses	(198,570)	(358,488)	(45)
	Profit for the period	693,971	984,787	(30)
	Profit attributable to;
	Owners of the Company	693,971	984,787
	Non controlling interest	-	-
		693,971	984,787	(30)
	Earnings per share
	Basic earnings per share (Rs.)	1.85	2.63	(30)
	Diluted earnings per share (Rs.)	1.85	2.63	(30)

The Notes form an integral part of these Interim Financial Statements.

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