Suiza Salvadoreña reports 9.6% profit growth

El Salvador's second biggest insurer Aseguradora Suiza Salvadoreña (Asesuisa) reported net income of US$4.26mn in 2003, a 9.6% increase from the year before, according to a company statement. Total revenues from insurance operations rose 8.6% to US$97.2mn thanks to a 7% increase in net premiums and lower reserves. The company's technical result from operations fell 21.5% to US$6.42mn due to a jump in reserve provisions and commercial expenses. Operating income totaled US$2.54mn, a 47.7% increase from the year before. "This is a very profitable company even though its technical result has fallen, due more than anything to higher [commercial] costs," local rating company Equilibrium Clasificadora de Riesgo director Carlos Pastor told BNamericas. Asesuisa's commercial expenses, or the fees paid to intermediaries like brokers and sales agents, grew 57% to US$10.6mn, compared to 22% for the industry. "With the high level of competition between the companies one of the ways to sell more products is through intermediaries," Pastor said. The company's assets remained virtually unchanged at US$46.4mn. Financial investments grew 9.6% to US$19.4mn. On the other side of the balance sheet, technical reserves were up 3.1% at US$12mn, while claim reserves grew 37.7% to US$3.34mn. Equity was nearly unchanged at US$15.7mn. Asesuisa had an ROE and ROA of 27% and 9% last year, compared to 19% and 7.7% for the industry as a whole, Pastor said. El Salvador's top five insurers last year in terms of net premiums were: SISA, Aseguradora Suiza Salvadoreña, La Centro Americana, Compañía General de Seguros, and Aseguradora Agrícola Comercial.