Date: June 1, 2018
General Accident Insurance Company Limited (GENAC) Annual Meeting was held today June 1, 2018. For the financial year in review, the Company had a disappointing year closing with an underwriting loss in for the first time in recent years.
Despite the underwriting performance, Gross premium moved up from $5.65 billion in 2016 to $7.11 billion in 2017, as the company entered a new segment of the Motor Market through the ‘AutoSmart’ brand for 2017. According to management, the ‘AutoSmart’ brand played a major role in the hike in revenues as this promoted strong sale and renewed relationships. In addition, net premium earned totaled $1.33 billion for the period relative to 1.14 billion of the previous year. Claims Expenses saw a significant increase to amount to $1.09 billon (2017: $746.07 million). notably, the company made a net profit of $221.24 million, 43% less than the $386.88 million for 2016.
Underwriting result tumbled as claims rose within the motor line segment of the business. “A Further uptick in claims severity for third party claims also aggravated or loss development. The combination of increased severity and frequency produced a deteriorating loss ratio of 82%.” The Company’s administrative ratio remained flat with a trend up in commission expense compensating lower underwriting expenses. The investment portfolio continues to expand as it produces excellent result. We see a shift up in the overall investment income which amounted to $328.38 million.
The performance for the first quarter ended March 31, 2018 saw Net Premium Written of $430.59, a 25% increase from the $344.45 million reported in 2017. This increase was driven by 12% increase in Gross Premium Written to $2.21 billion (2017: $1.97 billion) with Reinsurance Ceded grew by 9% totaling $1.75 billion. The company saw a rise in its claims expenses of 6%, closing the period at $248.08 million while Management Expenses rose 29% to total $172.31 million. Management noted that, “our operating expenses grew by 29% resulting primarily from increased staff cost and restructuring.”
Outlook
- Plans to pay special attention with the reorganization of the Motor Property & Casualty businesses. The ‘AutoSmart’ brand will be used to focus on Public Passenger Vehicle (PPV) and other specific segments of the market with emphasis on a high-quality motor business.
- Recruiting of new talent
- Revamping business processes
- With the increase in premium rates on commercial property in Jamaica, the impact of “our strategy” will be further enhanced by increased premiums, commissions and underwriting profits on our large portfolio of commercial property risks.
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