Insurance companies offer investors protection and investment-linked products, but how do they match up as investments? Just three insurance companies are listed on the Singapore Exchange, Great Eastern Holdings, United Overseas Insurance (UOI) and Prudential. UOI is mainly a general insurer, and as such has the highest margins. In terms of price to net asset value, UOI offers the best value among SGX-listed companies and Asian insurers.

In addition to being undervalued vis-a-vis other Asian insurance companies, UOI won the Best Risk Management Award in 2019 by the Singapore Institute of Directors. What’s more, it probably has one of the highest capital adequacy ratios in Asia, at 449%. Its credit rating is A+ with a stable outlook from A.M. Best, the de facto independent international credit rating agency for the insurance industry.

UOI will be celebrating its 50th Anniversary this year. United Overseas Bank is UOI’s major shareholder with a 58% stake. When UOB celebrated its 80th anniversary, it gave shareholders a special dividend in addition to the usual dividend payout. Market watchers reckon UOI could do likewise this year given its hefty capital adequacy ratio. As at Dec 31, 2020, UOI had shareholders funds of $424.4 million, an increase of 1.4% y-o-y despite FY2020 being a pandemic year, translating into a net asset value per share of $6.9. As at 1QFY2021, NAV per share had risen to $7.22.

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