09/02/2004(Media Release)

Great Eastern Holdings Ltd Hits a Record High Profit of $312.2 Million for 2003

Singapore, 9 February 2004: Great Eastern Holdings Limited announces Profit Attributable to Shareholders of $312.2 million for the year 2003, an increase of 33.5% over $233.8 million for the year 2002. This is a record high for the Group, and it exceeds the expectations of analysts. The improved performance was principally due to the general improvement in the economic climate and equity markets in the second half of the year and strong underwriting performance.

The Company is also pleased to announce an Embedded Value per share of $9.35 for 2003, 19.5% higher than $7.83 for 2002.

Insurance Operations
Group gross premiums totalled $5,056 million in 2003, a drop of 4.1% from $5,272 million in 2002, primarily as a result of the weaker sales in the first half of the year when the Iraq war and the SARS outbreak weakened consumer spending and caused a setback in the regional economies.

For life insurance operations, pre-tax profit contributed by the Participating, Non-Participating and Investment-Linked Funds increased by 54% from $182.1 million to $280.7 million. Pre-tax profit from the Non-Participating Fund grew significantly by 131% from $71.1 million to $164.1 million, due mainly to the strong underwriting performance, improved investment returns and a write-back in provision of $27 million. Pre-tax profit from the Investment-Linked Fund increased 62% to $31.8 million. However, profit from Participating Fund dropped by 7.2% to $84.8 million.

For general insurance operations, pre-tax profit dropped by 70% from $83.0 million in 2002 to $25.2 million in 2003. The higher profit in 2002 was due mainly to a non-recurring profit of $69 million from the disposal of certain investments of the General Insurance Fund.

Overall, pre-tax profit from insurance operations (both life and general) increased by 15.4% to $305.9 million. The Malaysian sector showed a good increase of 38% from $112.5 million to $155.4 million. Singapore’s pre-tax profit however dropped by 1.4% from $152.6 million to $150.5 million.

Profit from Investments
Pre-tax profit from investments of the Shareholders’ Fund jumped to $94.1 million, an increase of 135% from $40.1 million in 2002, as a result of the general improvement in equity markets in the second half of 2003, a one-time dividend income, and some exchange gains.

Total Assets
The Group’s total assets as at 31 December 2003 amounted to $32,352 million, 18.3% higher than $27,346 million a year earlier. The net asset value per share improved 24% from $3.46 as at 31 December 2002 to $4.29 as at 31 December 2003.

Market Share
In Singapore, the Group continued to be the market leader in the life insurance business with a market share of 26.5% in terms of weighted premium. This is due largely to its strong brand, the cohesiveness between its tied agency and bancassurance distribution channels and its quality customer service.
In Malaysia, Great Eastern also maintained its No.1 position with a market share of 23.2%, despite the increased competition from other players in the industry.

Dividend
In September 2003, an interim dividend of 6 cents (gross) per ordinary share of 50 cents each was paid to shareholders. The Directors will recommend for approval the payment of a final dividend of 18 cents (gross) per ordinary share of 50 cents each, less Singapore income tax at 22%.

Outlook for the Next Twelve Months
The operating environment and the equity and foreign exchange markets in the region improved in the second half of 2003. In the next twelve months, the stronger economic growth forecast for Singapore, Malaysia and several of the countries in the region would provide a favourable backdrop for the Group’s performance. The Group’s performance would also continue to be affected by factors such as volatility in the equity, foreign exchange, credit and interest rate markets. The performance might also be affected by severe environmental factors such as the spread of the avian flu currently afflicting a number of countries in the region.

For more information, please contact:

Boon-Gek Mudeliar
Head, Corporate Communications
DID: 6248 2215
Email: boon-gekmudeliar@lifeisgreat.com.sg