The best way to describe GEH, according to Fitch Ratings, is that the insurer is “very strong given its low asset leverage and solid statutory capital buffer”. “GEH’s consolidated capital score, as measured by the Prism Global Model, stayed in the ‘Extremely Strong’ category at end-2024 when net contractual service margin (CSM) was included as part of available capital,” says Fitch.
Fitch estimates the group’s asset leverage at end-2024 at only about 7.1 times, well below the guideline for insurer financial strength (IFS) “AA” rated life insurers.
In January, GEH issued US$500 million ($644 million) additional regulatory Tier 1 (AT1) perpetual capital securities. “With the inclusion of the AT1 securities, GEH’s financial leverage on a consolidated basis was less than 4% at end-2024 on a pro-forma basis, well below the guideline for IFS’s “AA” rated life insurers. We believe the key operating subsidiaries of GEH have the flexibility to access debt markets to raise funds if needed,” Fitch says.
Interestingly, GEH’s capital adequacy ratio (CAR) is not published, although the CAR for the Singapore life insurance subsidiary is available on an annual basis. However, in March 2024, in a prospectus ahead of its $500 million perpetual securities issued in April 2024, GEH published its CAR, which was 204.9% in FY2023.
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Fitch ranks GEH’s company profile as “Favourable” as a result of a “Favourable” business profile and “Neutral” corporate governance compared with that of other insurers in Singapore. The ‘Favourable’ assessment reflects GEH’s diversified market coverage, wide product spectrum, strong distribution capability, large operating scale, well-established brand franchise and leading market position in the Singapore and Malaysia life insurance segment.
To Fitch, GEH’s financial performance is “Very Strong” given its diverse revenue sources, stable earnings generation and consistent value of in-force (VIF) business growth. VIF expanded by 4.65% to $11 billion in 2024 despite higher risk discount rates in Singapore and Malaysia and the unfavourable changes in actuarial assumptions for medical insurance. GEH’s new business value (NBV) and the equivalent of new business embedded value (NBEV), however, dropped by 9% to $621.5 million in 2024 due to revisions in actuarial assumptions. GEH’s consolidated return on equity (ROE) averaged 11% from 2023 to 2024.
In 1H2025, GEH announced 16% y-o-y growth in NBEV to $316.5 million. Its interim dividend of 50 cents per share works out at $236.65 million. That could take embedded value per share on a back-of-envelope estimate to $38.37 per share.
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An accounting standard, International Financial Reporting Standard (IFRS) 17, came into effect for GEH’s financial reporting in FY2023. New business profit is no longer recognised immediately in the income statement. Instead, future projects are recognised in the contract service margin (CSM) on the balance sheet. The CSM is then released into the income statement over the life of the insurance contract as services are provided.
This lessens the impact of the mark-to-market gains and losses but lowers GEH’s NAV. Nonetheless, it is a testament to GEH’s profitable operating performance that its NAV rose to $18.35 as at end-December 2024, up from $16.66 a year earlier.
To recap, on May 10, 2024, OCBC made a voluntary general offer (VGO) for GEH, for the shares it did not own, with an offer of $25.60 per share. At the time, OCBC already held 88.44% of GEH. The VGO raised OCBC’s stake to 93.75%. This left GEH as a suspended stock on the SGX. To solve the suspension, GEH held an EGM on July 8 for the minority shareholders to vote for or against delisting. The delisting resolution failed. Instead, all the shareholders voted to change GEH’s constitution to enable to issuance of Class C and bonus shares.
GEH’s dividends will be paid on Sept 5; its new Class C shares are likely to be announced on or around Aug 14; the issuance of bonus and Class C shares is likely to be announced on or around Aug 19, and the crediting of bonus shares would be around Aug 21. The bonus shares and Class C shares will be entitled to the interim dividend.
According to GEH’s website, its origin dates back to 1908 when Alfred Hewton Fair, a former general insurance agent, saw the potential for a local life assurance company tailored around the needs of Malayans, and whose culture the company adopted. At the time, there were already several foreign insurance companies present.
This year, on Singapore’s 60th birthday, GEH operates alongside home-grown Income, the storied Prudential PLC and AIA. These are also the four domestic systemically important insurers (D-SIIs).
It can be said that GEH has gone through war, depression, recession, high interest rates, low interest rates, suspension, and perhaps re-listing. Through it all, the insurer remains an integral part of Singapore society and the Singapore story.
