SGX Mainboard | Ticker: U13.SI | Financial Year Ended 31 December 2025
- Executive Summary
United Overseas Insurance Limited (UOI) delivered a solid FY2025 performance, reporting core net profit growth of 8% year-on-year (y-o-y) to S$32.3 million — the highest in recent history. While the underlying insurance service result weakened due to elevated claims and transformation expenses, the profit growth was driven by strong non-underwriting income, a robust investment portfolio, and a one-off tax refund. Total comprehensive income surged 73% to S$67.5 million, supported by significant unrealised investment gains.
Reflecting its confidence in the business, UOI’s Board proposed a final dividend of 19.5 cents per share for FY2025, bringing total dividends for the year to 26.5 cents per share — a 15.2% increase from FY2024. At the prevailing share price of S$7.93, this implies a dividend yield of approximately 3.3%, and notably, UOI is trading at a slight discount to its net asset value (NAV) of S$8.55 per share. - Financial Performance
2.1 Core Profitability
The following table summarises UOI’s key profit metrics for FY2024 and FY2025:
Metric FY2024 FY2025
Revenue (Core Insurance) S$113.1m S$115.4m
Insurance Service Expenses S$64.0m S$73.4m
Net Insurance Service & Financial Result S$19.4m S$15.3m
Non-Underwriting Income S$14.4m S$16.6m
Core Net Profit S$29.8m S$32.3m
Other Comprehensive Income S$9.3m S$35.2m
Total Comprehensive Income S$39.0m S$67.5m
Revenue grew modestly at ~2% to S$115.4 million, supported by retail and reinsurance lines, new partnerships, and transformation initiatives. Despite this, insurance service expenses rose sharply by 14.7%, compressing the net insurance service and financial result by 21% to S$15.3 million. This deterioration in underwriting profitability is a critical observation for analysts: the headline 8% profit growth masks a weakening core.
2.2 The Investment Income Offset
The gap between a weaker underwriting result and a higher net profit was bridged primarily by non-underwriting income, which rose 15% y-o-y to S$16.6 million on the back of proactive portfolio management. UOI’s investment strategy, which includes a significant equity stake in Haw Par Corporation (owner of the Tiger Balm brand), proved highly rewarding. UOI holds more than 4.27 million Haw Par shares, and in 2025, Haw Par’s share price closed the year at S$15.68, a gain of approximately 40.6% from end-2024.
The resulting valuation gains on unsold investments drove other comprehensive income (OCI) up 278% to S$35.2 million, lifting total comprehensive income to S$67.5 million — a 73% y-o-y increase. This investment-driven earnings pattern, while positive for overall returns, introduces earnings quality considerations: OCI gains are unrealised and mark-to-market, meaning they are sensitive to market conditions.
- Balance Sheet & Valuation
UOI’s balance sheet reflects a conservatively managed insurer with significant financial strength:
Metric FY2024 FY2025
Total Assets — S$652m
Total Liabilities — S$129m
Net Asset Value (NAV) per Share ~S$7.63 S$8.55
Year-End Cash Position ~S$98m ~S$57m
Share Price (Feb 20, 2026) — S$7.93
Price-to-Book Ratio — ~0.93x
The NAV per share of S$8.55, combined with a share price of S$7.93, places UOI at a price-to-book (P/B) ratio of approximately 0.93x — meaning the stock is trading at a discount to its stated net asset value. For an insurer with a strong investment portfolio and consistent dividend growth, this discount may represent a valuation opportunity. The year-on-year NAV increase of ~12% further evidences wealth compounding within the entity.
Cash decreased by ~S$41 million to S$57 million, largely attributable to increased investment activity. This is consistent with management’s strategy of deploying capital into higher-yield investments, and does not signal financial stress given the strength of the broader balance sheet.
- Dividend Analysis & Shareholder Impact
4.1 Dividend Trajectory
UOI’s dividend policy reflects a pattern of sustained and increasing returns to shareholders:
Metric FY2024 FY2025
Interim Dividend per Share — 7.0 cents
Final Dividend per Share (proposed) 14.5 cents* 19.5 cents
Total Dividend per Share 23.0 cents 26.5 cents
Y-o-Y Dividend Growth — +15.2%
Dividend Yield (at S$7.93) — ~3.3%
Final Dividend Payment Date — 22 May 2026
- FY2024 final dividend of 14.5 cents comprised a combined final and special dividend.
4.2 Shareholder Impact
The 15.2% increase in total dividends per share for FY2025 is a meaningful signal of management’s confidence in the sustainability of earnings. Notably, the proposed final dividend of 19.5 cents per share — five cents higher than FY2024’s combined final and special dividends — suggests that what was previously structured as a ‘special’ dividend component has now been incorporated into the ordinary dividend, implying greater earnings visibility and a higher structural dividend baseline going forward.
For income-oriented investors, a ~3.3% yield on a stock trading below book value, supported by a growing dividend trajectory and a well-capitalised balance sheet, presents a defensively attractive investment profile. Long-term shareholders benefit from a dual return mechanism: regular dividend income supplemented by NAV appreciation driven by the appreciating investment portfolio.
- Strategic Outlook & Growth Drivers
5.1 ASEAN Expansion
Management has articulated a clear strategic vision centred on ASEAN market growth. Key structural tailwinds include rising middle-income consumer populations, accelerating urbanisation, growing risk awareness, and rapid digitalisation. These factors are driving sustained demand in both retail insurance and commercial/SME segments. Infrastructure development and manufacturing activity across the region further underpin demand for commercial lines.
5.2 Digital Transformation
UOI is investing actively in technology, talent, and capabilities. The increasing use of digital payments is cited as enabling more scalable and efficient distribution models — a critical competitive lever in markets where traditional agent-based distribution is costly and slow. The transformation expenses that weighed on FY2025 insurance service costs should be viewed in the context of this medium-term strategic investment, with the expectation that they will yield operational efficiencies and market share gains over time.
5.3 UOB Partnership
UOI’s parent relationship with United Overseas Bank (UOB) provides a significant distribution advantage across ASEAN. UOI has explicitly committed to strengthening collaboration with UOB, leveraging the bank’s extensive regional network and customer base for bancassurance distribution — a model that is both capital-efficient and scalable. This relationship de-risks UOI’s distribution growth relative to peers who must build independent agent networks. - Key Risks & Considerations
Despite the positive headline performance, several risks warrant attention from an analytical standpoint:
Earnings Quality Risk: A significant portion of FY2025’s comprehensive income was driven by unrealised investment gains (OCI of S$35.2m). These are mark-to-market in nature and subject to reversal if equity markets correct. The underlying insurance business produced a weaker net service result in FY2025.
Underwriting Deterioration: The 14.7% rise in insurance service expenses, resulting in a 21% decline in the net insurance service and financial result, is a negative underwriting trend. If claims inflation or higher transformation costs persist, they could erode the underlying profit base.
Concentration Risk: The investment portfolio’s notable exposure to Haw Par Corporation introduces concentration risk. While Haw Par performed exceptionally in 2025 (+40.6%), this is not guaranteed to repeat, and a correction in Haw Par’s valuation could significantly impact UOI’s OCI and total comprehensive income.
Cash Reduction: Cash decreased by ~S$41 million y-o-y, and while this reflects investment deployment, it reduces liquidity headroom. Management’s ongoing investing activities must be monitored for capital allocation discipline.
ASEAN Macro & Geopolitical Risk: UOI’s growth strategy is heavily contingent on ASEAN economic conditions, regulatory environments, and geopolitical stability across multiple jurisdictions, each carrying distinct risk profiles.
- Conclusion
UOI’s FY2025 results present a nuanced picture of a financially sound insurer delivering headline profit growth through investment-driven returns, even as its core underwriting performance faces pressure. The 8% rise in core net profit and 73% surge in total comprehensive income, combined with a 15.2% dividend increase and stock trading at a discount to NAV, make UOI an interesting case study in value creation through a hybrid underwriting-and-investment business model.
The key analytical question looking ahead is whether UOI can restore underwriting margin improvement — specifically, whether the current transformation investments will yield the efficiency gains and growth necessary to rebuild the net insurance service result. If they do, and if the investment portfolio continues to perform, UOI is well-positioned to deliver compelling compounded shareholder returns across its ASEAN footprint.
For investors, the combination of a sub-book valuation, growing dividends, a strong balance sheet, and a credible ASEAN growth strategy provides a compelling long-term investment thesis — balanced against the risks of investment earnings volatility and underwriting cost pressure in the near term.