Great Eastern Holdings has reported full-year 2010 net profit to shareholders of $507.2 million which is comparable to full-year 2009 profits of $516.7 million.

Despite challenging investment conditions in 2010 caused by volatile interest rates, Great Eastern says the results were underpinned by a strong growth in underwriting profits, healthy growth in new business sales from the group’s regional businesses and higher long term profitability of the group’s businesses as measured by new business embedded value.

Year-on-year, total weighted new sales for the group rose 20% to $723.8 million, driven by the strong growth of 34% in regular premium products. In 4Q10, total weighted new sales for the group rose 26% to $237.9 million from $188.9 million. This is a record in terms of sales in a single quarter.

In Singapore, sales of regular premium products were 43% higher with strong growth in the bancassurance channel. The Malaysian business achieved 20% growth in sales in 4Q10 over 4Q09 with more than half the sales in 4Q10 comprising regular premium investment linked products.

The group also continued to make significant inroads in its regional expansion. Indonesia registered a seven-fold growth in regular premium sales from initiatives to increase the size and the productivity of its agency force.

China registered 30% growth in regular premium sales and a two-fold increase in single premium sales in the bancassurance channel.

For the full year, New Business Embedded Value (NBEV), a measure of the long term profitability of new sales, registered double-digit growth of 30% from $234.6 million in FY-09 to $304.9 million in FY-10. In 4Q10, NBEV grew strongly by 31% to $102.3 million.

Full-year profit in 2010 from insurance operations and investments in shareholders’ fund were $460.0 million and $144.3 million respectively. The corresponding figures for 2009 were $751.9 million and a loss of $127.2 million. In 2009, there was a one-time contribution of $210.4 million to profit from insurance operations as a result of adopting the new risk-based regulatory capital framework in Malaysia and the portfolio matching exercise in Singapore.

On the other hand, Great Eastern’s one-time redemption offer to GreatLink Choice policyholders in 2009 incurred a loss of $213.3 million which was reported under investment in the shareholders’ fund. These two exceptional non-recurring items largely accounted for profit variations between 2010 and 2009. Taken together, the two exceptional items had no material financial impact on the group’s results for 2009. Full-year 2010 net profits to shareholders, as previously stated, remain strong and comparable with 2009 results.

In 4Q10, rising interest rates in both Singapore and Malaysia affected the investment returns on fixed interest assets. In contrast, investment returns in 4Q09 had benefited from a strong recovery in credit markets led by falling interest rates from various government initiatives to stimulate the economy after the global financial crisis. These swings largely explain the change in group profit attributable to shareholders in 4Q10 compared with 4Q09 (4Q10: $85.1 million, 4Q09: $148.4 million).

Great Eastern Takaful Sdn Bhd (GETSB), a joint venture company between I Great Capital Holdings Sdn Bhd (i-Great), a subsidiary of Great Eastern Holdings, and Koperasi Angkatan Tentera (M) Berhad (KAT), was officially launched today.

GETSB will be helmed by En. Mohamad Salihuddin Ahmad, its Executive Director and Chief Executive Officer. Salihuddin has over 22 years of broad-based experience in the insurance and Takaful industry, with a strong foundation in both marketing and operations of various distribution channels that span across agency, bancassurance, branch and corporate intermediaries.

GETSB will adopt a “Takaful for All” approach and provide comprehensive Takaful products and services for all Malaysians, both Muslims and non-Muslims alike, says Great Eastern.