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Lower reserve adjustments help Grupo Sura more than double Q4 profit

Grupo de Inversiones Suramericana SA more than doubled its fourth-quarter 2017 profit from a year earlier as the company registered higher commission income, investment income and revenues from services.

Grupo Sura, as the company is known, posted consolidated net income of about 357.18 billion Colombian pesos for the three-month period, up 102.5% from the 176.38 billion pesos earned in the fourth quarter of 2016. The firm's full-year 2017 profit, however, fell 13.0% from the previous year to about 1.455 trillion pesos amid a 12.0% increase in administrative expenses and a rise of 21.5% in the cost of services rendered.

In the fourth quarter, Grupo Sura's net retained premiums fell 3.6% year over year to 3.124 trillion pesos, with written premiums declining 1.1% to 3.821 trillion pesos.

Commission income improved 10.7% on an annual basis to reach 614.77 billion pesos in the fourth quarter, while revenues from services rendered ticked 21.6% higher to 753.58 billion pesos. Investment income increased 16.7% to 477.23 billion pesos from 408.92 billion pesos a year ago.

Also contributing to the higher quarterly profit was a sharp fall in expenses related to reserves adjustment, which dropped 58.4% to 373.25 billion pesos in the fourth quarter from 896.67 billion pesos a year earlier. The company's total administrative expense increased 2.7% to 963.63 billion pesos.

Grupo Sura's main insurance unit, Suramericana SA, posted net income of 113.66 billion pesos for the fourth quarter, improving from a net loss of 32.18 billion pesos in the year-ago period. The subsidiary's revenues from services rendered jumped 22.4% while its investment income increased 13.7%.

As of Feb. 26, US$1 was equivalent to 2,847.10 Colombian pesos.