Asia Financial hard hit by disasters, investments
Asia Financial plunged into the red last year following heavy insurance payouts to natural disaster victims and an investment loss caused by the downturn in markets.
The company, which is engaged in the underwriting of general and life insurance and securities trading and holding, posted a net loss of HK$137.5 million, against a profit of HK$268.8 million in 2010. The insurance sector made a loss of HK$57.6 million.
Natural disasters in Asia and Australia, including the earthquakes in Japan and New Zealand, and flooding in Australia and Thailand, resulted in a substantial fall in profit for the insurance business, the company said in its results announcement.
Income from other investments including securities and bonds dropped to a loss of HK$69.1 million from a profit of HK$544.8 million in 2010. The loss was mainly caused by the stock market downturn in the second half of last year.
Executive director Stephen Tan said yesterday the company had no significant exposure to euro-zone debt and would reduce its exposure to securities and increase its weighting of fixed-income products in order to better position itself against market volatility.
Tan also said the company would continue to step up its business on the mainland.
The company set up a joint venture with the People's Insurance Co of China, which reported 70.4 billion yuan (HK$86.7 billion) in gross premiums last year - down 2.4 per cent from the previous year.
Tan said the mainland continued to be an important market for insurance business, although the industry would be overshadowed by economic uncertainties at home and aboard.
The firm cut its final dividend to 2 HK cents per share from 6.5 HK cents previously, leaving its total payout for the year at 3.5 HK cents per share.
Its shares closed unchanged at HK$2.90 yesterday.