Irish Life takes hard knock from GPA stake
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Your support makes all the difference.IRISH LIFE'S investment in GPA, the troubled aircraft leasing group, contributed to an Ir pounds 46m ( pounds 47m) fall in the life insurance company's so-called embedded value - an actuarial valuation for shareholders of the company's business, writes Paul Durman.
The virtual write-off of an Ir pounds 24m GPA stake held by Irish Life's non- linked fund helped to push embedded value 9 per cent lower to Ir pounds 494m. Other investment losses and forthcoming taxation changes each 'cost' Irish Life a further Ir pounds 16m.
The life office, which is still 34 per cent owned by the Irish government, said the comparison with its 1991 embedded value was further worsened by Ir pounds 25m of dividends it paid last year.
Irish Life had to write off another Ir pounds 46m of GPA stock, which was held on behalf of investors in its unit-linked funds. The group has half its Ir pounds 1.6bn of equity holdings in the Irish market, which fell by about 8.5 per cent last year. Irish Life Assurance owns 7.6 per cent of the group's own shares. The group increased profits by 3 per cent to Ir pounds 41.6m in 1992. Regular premium income from the main Irish business rose by 2 per cent to Ir pounds 259.2m, while single premium investments fell by 21 per cent to Ir pounds 152.5m because of poor investor confidence.
The UK business was hit by recession but, in sterling terms, achieved premium increases. However, sterling's devaluation meant regular premium income fell by 8 per cent to Ir pounds 61m and single premiums by 2 per cent to Ir pounds 26.2m.
Interstate, Irish Life's US business, had a better year, improving regular premiums by 27 per cent to Ir pounds 20.4m.
Brian Duncan, chief executive of Irish Life Ireland, said his business was showing a modest improvement, helped by lower interest rates and better stock market performance.
Irish Life is paying an unchanged final dividend of Ir5.44p net. With the tax credit, the total gross dividend rises 4 per cent to Ir10.98p a share.
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