GENAC reports 142% increase in first quarter net profit

May 20, 2020

General Accident Insurance Company Limited (GENAC) for the three months ended March 31, 2020, reported gross premium written of $2.54 billion, 5% lower than the $2.69 billion reported in 2019. Reinsurance ceded fell 14% to close at $1.81 billion relative to $2.11 billion booked in 2019. Excess of loss reinsurance trended upwards by 29% to $39.02 million (2019: $30.25 million).

As a result, net premium written increased by 27% from $543.08 million for the first quarter of 2019 to $689.13 million for the three months ended March 31, 2020.

Net changes in unearned premiums totalled $18.82 million, 67% less than the $57.72 million recorded last year. Consequently, net premiums earned grew by 38% year over year to a total of $670.30 million compared to $485.36 million for the prior year.

Commission income declined 27%, year over year, from $236.18 million in 2019 to $173.34 million in  for the three months ended March 31, 2020, while commission expenses fell 56% from $193.25 million in 2019 to $84.98 million for the first quarter of 2020.

Claims expenses saw an increase of 52%, closing the quarter at $447.53 million (2019: $294.21 million), while management expenses climbed 40% to total $268.311 million compared to 2019’s total of $191.06 million.

Underwriting profit for the quarter amounted to $42.83 million, this compares to a profit of $43.01 million booked for the first three months of 2019.

Investment income closed at $49.57 million, a 60% increase when compared with last year’s corresponding quarter of $31.01 million. Other income for the quarter was $24.11 million for the quarter, relative to other losses of $24.46 million in 2019. Other operating expenses grew by 110% to $23.75 million relative to $11.32 million in 2019.

Profit before taxation amounted to $91.34 million (2019: $37.05 million). Following taxes of $16.62 million (2019: $6.17 million), net profit totalled $74.72 million for the quarter, an increase of 142% compared to the $30.87 million reported for the previous year’s comparable quarter.

Total comprehensive income for the quarter amounted to $68.35 million relative to a total comprehensive loss of $2.38 million for the quarter ended March 31, 2019.

As such, earning per share for the period amounted to $0.072 (2019: $0.030). The trailing twelve months EPS amounted to $0.67. The stock traded at $4.93 as at May 20, 2020. The number of shares used in our calculations amounted to 1,031,250,000 units.

Management noted that, “General Accident was well on the way to providing several online services and many of these were fast tracked to completion during the first weeks of the pandemic, including payment online and electronic submission of documents. Roughly half our head office staff were able to work from home, especially those with long public transportation commutes or underlying health vulnerabilities.” Furthermore, Management continued, “for our customers, we have offered favourable payment terms and new discounts, as well as assistance in navigating our online systems.”

Balance Sheet at a glance:-

Total Assets increased by 60% to $12.04 billion as at March 31, 2020 from $7.53 billion a year earlier. ‘Investment Securities’ contributed the most to the growth in assets with a 60% increase to $4.51 billion relative to $2.82 billion in 2019. Due from reinsurers and coinsurers also contributed to the increase with a 39% growth year over year to close at $2.65 billion (2019: $1.90 billion) as well as a 143% increase in ‘Cash & Short Term Investments’ to close the quarter at $1.06 billion (2019: $436.69 million).

Shareholder’s Equity as at March 31, 2020 stood at $2.59 billion (2019: $2.05 billion) resulting in book value per share of $2.51 (2019: $1.99).


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