• Consolidated revenue growth of 15% (2005: Rs 4,277M  2004: Rs 3,728M)
• PAT Growth of 103% ( 2005: Rs 515M  2004 : Rs 254M)
• Life and Non life businesses growing rapidly.
• Life fund solvency margin 7.1 % (Rs  186 M above requirement)
• A dividend of Rs 5.75 per share being proposed.

Eagle Insurance recorded an impressive performance for the year 2005, recording a group net profit after tax of rupees 515 million, a growth of 103% over 2004. Even if 2004 profits  are adjusted for special tsunami related expenses, the profit growth is still attractive at 50%. The consolidated balance sheet was further strengthened with Net Assets recording a growth of 36 % over the previous year. This is a reflection of Eagle’s effective execution of planned strategies in the areas of revenue expansion, investments and expense management. The Group also maintained its solid track record in delivering impressive shareholder returns with a Return on Net Assets (RONA) of 35% for 2005. The Company paid an interim dividend of rupees 2.50 per share in 2005 and the Directors now propose a final dividend of rupees 5.75 per share.

The Consolidated Revenue of rupees 4,277 million recorded a commendable growth of 15%.  Commenting on the performance,  Deepal Sooriyaarachhci the Managing Director of Eagle Insurance said , “ We are delighted with our performance specially considering that 2005 has been a very challenging year for the industry”

 The Life business continued to maintain its strong market position by recording Gross Written Premium of rupees 2,833 million, a growth of 13 % over the previous year. This achievement was a result of focused business development activities and strategic allocation of resources into the expansion of distribution. In addition to the top line growth, Eagle was also successful in enhancing its customer retention. During 2005, the Life fund grew from rupees 7,985 million to rupees 9,238 million recording a 16 % growth. This value creation was possible due to the combined contribution of new business, retention and prudent investment strategies. The increase in average policy value further reflected the Company’s efforts towards improving its quality of business.

Benefits, losses and expenses of the Life business increased by 63% primarily due to policy maturities and gratuity claims. Stretching beyond its insurance liabilities, the Company made a premium grant of three months to the most deserving tsunami affected Life policyholders. The Life surplus transferred to the shareholders increased appreciably by 50 % to rupees 375 million as against rupees 250 million during the previous year.

The Non-life business recorded a Gross Written Premium income of rupees 1,211 million, a 14 % increase over 2004. The growth in Non-life written premium was achieved without compromising on the Company’s selective underwriting strategy in a highly competitive market. Despite many challenges, the Non-life Business earned a net profit after tax of rupees 125.9 million compared to a loss of rupees 8.9 million in 2004.

The Asset Management business recorded a total Revenue of rupees 54.8 million in 2005. Compared to 2004, this was a growth of 17%. Asset management fee income grew by 15 % to rupees 48.9 million. Focused and timely implementation of cost management strategies adequately reaped benefits for the business by positively contributing towards the bottom line of rupees 14.5 million profit after tax, a growth of 23% over the previous year.

Demonstrating its commitment to provide greater security to policy holders, the Company continued to maintain the solvency margins well above the regulatory requirements, both in the areas of Life and Non Life business. The Life Fund maintained a 7.1% solvency margin with an impressive rupees 186 million above the prescribed 5.0% solvency margin. The Company also continued to strengthen its reserve position. The independent Actuary has validated the Company’s Non-life claims reserves, including the reserve for IBNR claims ahead of the regulatory requirement that will be applicable in 2007.

“In view of enhancing the risk retention capability of the Company, the Directors have recommended increasing the Special Reserve Fund by rupees 32 million. The Resilience Reserve, another market first, set up to strengthen the Company’s capability to meet temporary variations in asset values, was also strengthened by rupees 70  million” added Mr Sooriyaarachchi.

On 1 February 2006, the international savings, investments and insurance group - Aviva plc -entered the Sri Lanka insurance market by acquiring the controlling stake of Eagle Insurance, through Capital Development & Investment Company’s sale of its 58.44% shareholding in NDB Finance Lanka (Pvt) Ltd. Aviva International Holdings Ltd is thus the ultimate holding company of Eagle Insurance Company Limited with an indirect share holding of 51%. Subsequently NDB Bank Ltd. acquired the 5% shareholding of James Finlay & Company (Colombo) Ltd. in Eagle Insurance and thereby increased its indirect shareholding in Eagle to 32.42%.  The new Eagle board consists of  Grant  Barrans (Chairman),  Deepal Sooriyaarachchi  (Managing Director),  Stuart Purdy,   Shoumitro Roye,  James McKay,  S N P Palihena,  Sarath Wikramanayake,  Nihal Welikala,  and Lal de  Mel.

The year saw the Company undergoing a smooth leadership  transition with  Deepal Sooriyaarachchi taking over as CEO from Chandra Jayaratne. Deepal Sooriyaarachchi was appointed as Managing Director following the ownership change. “Under Mr. Sooriyaarachchi’s leadership Eagle will continue to be dynamic and agile” stated new Chairman Grant Barrans.

Under the new ownership of Aviva plc, the world’s sixth largest insurer, Eagle once again becomes the only international composite insurer to operate in Sri Lanka. Eagle is therefore strongly  positioned  to capitalise on the unique advantages that can  be gained from this global connection, in order to provide enhanced value to all its stakeholders. More focused bancassurance initiatives will also be undertaken, leveraging Aviva’s expertise in this area starting with NDB bank the other prominent share holder. Customers of NDB bank will benefit further from this bancassurance tie up.

About Aviva.
Aviva is the world’s oldest insurance group, with a history dating back to 1696. The Group has 60,000 employees serving 30 million customers in over 25 countries with more than Sterling Pounds 290 billion assets under management.  Aviva Plc is the largest insurer in the UK and one of the leading providers of life and pension products to Europe. Its main activities are Long Term Savings, Fund Management, and General Insurance.