April 13, 2021
IronRock Insurance Company Limited (ROC), for the year ended December 31, 2020 posted gross premiums of $836.97 million relative $701.42 million; representing a 19% increase. Fourth quarter gross premium amounted to $233.76 million, a 3% increase when compared to $226.81 million for the corresponding quarter of 2019.
Change in gross provision for unearned premiums amounted to $29.91 million compared to $71.21 million in 2019. Resulting in gross insurance premiums revenue of $807.06 million (2019: $630.21 million).
Written premiums ceded to reinsurers amounted to $647.27 million relative to $455.58 million in 2019, a 42% increase year over year and Reinsurers’ share of change in provision for unearned premiums amounted to $33.26 million (2019: $47.24 million). As a result, net insurance premium revenue amounted to $193.05 million (2019: $221.88 million), while for the quarter, net premium declined 23% to $48.42 million (2019: $63.22 million).
Claims expenses incurred closed the twelve months period at $262.05 million (2019: $148.80 million), while Reinsurers’ share of claims and benefits incurred amounted to $172.49 million (2019: $15.37 million). As a result, net insurance claims totaled $89.56 million for the year ended December 31, 2020 (2019: $133.43 million).
Commission expenses incurred totaled $93.59 million in contrast to 2019’s $75.25 million, while commission earned grew by 72% from $86.25 million in 2019 to total $148.70 million for the year ended December 31, 2020.
ROC reported a profit before operating expenses of $158.60 million, 59% up from $99.44 million booked December 2019.
Operating expenses, for the year ended December 31, 2020, increased to $186.07 million relative to $163.62 million in the prior year. As such, underwriting loss over the year closed at $27.46 million versus a loss of $64.17 million in 2019. Moreover, for the fourth quarter, underwriting profit was $36.61 million (2019: $3.52 million).
Investment income increased from $38.71 million in 2019 to $40.21 million for 2020. Miscellaneous income amounted $161,000 (2019: $32,000) and gain on sale of investment amounted to $8.11 million compared to $27.57 million in 2019. Foreign exchange gain amounted to $11.82 million compared to a FX gain of $2.88 million in 2019.
As a result, profit before taxation totaled $32.83 million compared to a profit before taxation of $5.01 million in 2019. For the fourth quarter, the company booked profit before taxation of $45.87 million relative to a profit of $14.63 million reported in 2019.
Tax credit of $15.12 million was recorded (2019: nil), resulting in net profit for the period under review of $47.95 million (2019: $5.01 million). While for the quarter, net profit closed at $60.99 million (2019: $14.63 million).
Total comprehensive for the year totalled $17.72 million compared to $34.67 million booked twelve months earlier.
Earnings per share for the year totaled $0.22 (2019: EPS: $0.02); while EPS for the quarter was $0.29 (2019: $0.07). The numbers of shares used in the calculations are 214,000,000 units. The stock price as at April 12, 2021 was $2.88 with a corresponding P/E of 12.85 times.
Balance Sheet Highlights:
As December 31, 2020, assets totaled $1.40 billion (2019: $1.27 billion) increasing by 10% year over year. This increase is mainly due to Reinsurance assets increase by 138.55 million to end the year at $362.53 million (2019: $223.98 million). However the movement was tempered by a decrease in Investments by $107.61 million to $565.31 million (2019: $672.92 million).
Shareholder’s equity closed at $567.10 million (2019: $549.38 million). This resulted in a book value per share of $2.65 (2019: $2.57).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.
