UOI

[valuehunter]

Value investors may consider studying the financials of this company and make an informed decision as to whether it is worthwhile to invest in this business. Can an insurance business run by a prudent and conservative management be a rather decent investment proposition?

[johnseah3270]

I studied UOI's 3Q2010 results recently and found out that its annualised EPS is S$0.505 for this financial year, NAV about S$3.60 and decided to buy. You should make your own judgement. I cannot guarantee you will make money. Don't expect this stock to "chiong".

[nervesofsteel]

Pls correct me if im wrong, if we exclude the one time adjustments for adjustment in unearned premium reserves (UPR) in 2013, underwriting margins seems to have fallen quite a fair bit in 9m14 (14%) compared to 9m13 (19%) , 9m12 (17%).

Is this due to intense competition?

[SpeedingBullet]

Pls correct me if im wrong, if we exclude the one time adjustments for adjustment in unearned premium reserves (UPR) in 2013, underwriting margins seems to have fallen quite a fair bit in 9m14 (14%) compared to 9m13 (19%) , 9m12 (17%).

Is this due to intense competition?

Insurance rates worldwide have been under immense pressure due to competition. And a big dog has just entered Singapore to make it worse - Berkshire Hathaway. Their insurer license just got approved on early December, and they poached many high level ex-AIG Asia executives over in their push into this region.

UOI's expense ratio is finally positive, end of a long run.

[cyclone]

UOI will be announcing its 2015 full year financial results on Friday, 5 February 2016.

[cyclone]

Proposed Acquisition of the Property at 146 Robinson Road Singapore 068909

United Overseas Insurance Limited (“UOI”) announced that it has today entered into a property sale agreement with United Overseas Bank Limited (“UOB”) pursuant to which UOB has agreed to sell, and UOI has agreed to purchase, the property located at 146 Robinson Road, Singapore 068909, subject to the terms and conditions set out in the Property Sale Agreement.

The Property is a 12-storey office building with a basement level of gross floor area of approximately 4,631.49 square meters (sm), situated at Land Lot 99752A, Town Subdivision 2 of land area 422.1 sm or thereabouts, and has a leasehold estate of 99 years from 3 June 1992.

The total consideration for the Proposed Acquisition is S$52 million.

The Directors believe that the Proposed Acquisition is beneficial to UOI. The Property will be UOI’s first real estate investment and is intended to be held as a long term investment to enhance the fixed asset base of UOI. The Property would provide a hedge against rental increases in the property market. Rental income from leasing out excess space would diversify UOI’s income stream and lessen profit volatility. The Property has street level frontage and visibility in a busy area of the financial district. The Directors are of the view that upon acquisition and relocation to the Property, UOI will receive an immediate boost to its corporate image and branding.

More details in https://links.sgx.com/FileOpen/UOI%20Rob...eID=590933

[weijian]

It seems that our OPMI Hero Ong has become a flag bearer to rally long-suffering OPMIs. Since starting the warfront with GEH one year ago, he has now gathered enough contacts to launch a new battlefield with another insurer UOI.

Will it be dejavu all over again? Probably not since the Wee Web looks really mangled and any unlocking of 1 web will have ripple effects on the other webs. But since the "picture of Patriarch Wee with many names below" has already been published, you never know.

UOI ‘reviewing’ minority investor’s proposals, including distributing Haw Par shares

In a March 3 bourse filing, UOI says a shareholder has contacted the company “claiming to act on behalf of these minority shareholders”. “As the company understands, these proposed resolutions pertain to distribution of shares in Haw Par Corporation held by the company to its shareholders, and appointment of a financial adviser to explore options to unlock shareholder value”.

“The company would like to assure shareholders that the board and management welcome constructive suggestions from shareholders. The company is reviewing the matter and will make further announcements as and when appropriate,” reads UOI's response.

Activist value-investor Ong Chin Woo, who represents shareholders holding 5% of United Overseas Insurance U13’s shares in issue, has written to the Board of Directors proposing two resolutions to be tabled at UOI’s annual general meeting to be held in April.

Resolution 1: To distribute UOI’s 4,274,600 ordinary shares in Haw Par Corporation H02 directly to UOI shareholders.

Resolution 2: To appoint a financial advisor to evaluate strategic options for maximising shareholder value.

https://www.theedgesingapore.com/news/co...ng-haw-par

[weijian]

An unexpected reply would be the Wees letting OPMIs have their way With the lesson learnt from OCBC-GEH, the UO folks are doing better in terms of polemics. But OPMIs should keep knocking on the door and i suspect it will slowly creak.

UPDATE ON REQUEST TO TABLE RESOLUTIONS AT UPCOMING ANNUAL GENERAL MEETING

As the aforesaid request did not satisfy the relevant statutory requirements, the Company will not be tabling these proposed resolutions at its upcoming AGM.

Nevertheless, the Board and Management thank these minority shareholders for their feedback, and have carefully considered and deliberated their request. We will present our response at the Company’s AGM on 17 April 2025. We welcome our shareholders to attend and participate actively.

https://links.sgx.com/FileOpen/UOI%20-%2...eID=836586

[weijian]

OPMI Hero Ong's activist actions pip my interest to take a quick look at UOI. In general for an insurer, the key portion of your BS would be your "contract liabilities", or what Buffett calls "float". An insurer's float determines whether their insurance business is growing (or not).

Total Float = insurance contract liabilities + reinsurance contract assets

2015 (in '000)
Equity base = 311,519
Total Float = 204,906 + 117,149 = 322,055 (103% of equity)
Investment Portfolio = 352,568 (113% of equity)

2024 (in '000)
Equity base = 468,742
Total Float = 106,082 + 45,153 = 151,235 (32% of equity)
Investment Portfolio = 385,207 (82% of equity)

- So while UOI's equity base has increased by ~50% over the last 10years, but its float has reduced by 50% in the same period. As end FY24, its float is only 0.32x of equity, compared to life insurers whose float is X times of their equity base.

- It's probably unfair to compare UOI's float/equity ratio to life insurers since the latter gets more sticky and recurring premiums. But the absolute quantum of UOI's float has decreased at a mid single digit CAGR. Does this suggests that the insurance ops probably doesn't have a bright decade ahead?

- It's pretty clear that the declining float and the investment portfolio are coupling onto each other for justification, which explains why OPMI Hero Ong has suggested what he has done. Dismantling just any part of it, will probably mean the eventual unwinding of everything - with the insurer sold and unwinding of the investment portfolio. But since it is not really trading at steep discounts to its book and the investment portfolio are at FVOCI, there isn't a lot of meat if dismantle really happens.