November 17, 2020
General Accident Insurance Company Limited (GENAC), for the nine months ended September 30, 2020, reported Gross premium written of $9.32 billion, 4% higher than the $8.94 billion reported for 2019. Excess of loss reinsurance increased to $126.09 million, from $99.63 million reported in 2019 while Reinsurance ceded slightly increased to $7.21 billion relative to $7.20 billion in 2019. As a result, net premium written increased by 20% from $1.64 billion last year to $1.98 billion in 2020. Net premium written for the third quarter amounted to $683.24 million relative to $595.98 million booked for the corresponding period in 2019.
The Company highlighted that, “The Trinidad counterpart wrote premium of $282 million which was eliminated by the claims and operating expenses. Still in an embryonic stage, General Accident (Barbados) booked premium of $16 million.”
Net changes in earned premiums totalled $40.63 million, relative to an unearned premium of $109.94 million recorded the previous year. Consequently, net premiums earned grew by 32% to a total of $2.02 billion compared to $1.53 billion for the same period last year. For the quarter, net premium earned totalled $667.52 million compared to $546.20 million booked for the similar quarter of 2019.
Commission income fell by 7%, year over year, from $554.56 million in 2019 to $515.57 million in 2020, while commission expenses also went down by 9% from $380.09 million in 2019 to $346.03 million in 2020.
Claims expenses saw an increase of 38%, closing the period at $1.36 billion (2019: $987.60 million), also management expenses climbed by 38% to total $869.03 million (2019: $631.40 million).
Net change in commission totalled $32.87 million for the nine months compared to $18.30 million booked in 2019.
Consequently, Underwriting loss for the period totalled $6.19 million, this compares to a profit of $108.64 million in 2019. The company made an underwriting loss of $27.41 million for the third quarter when compared to a profit of $27.67 million in 2019. Genac explained that this result was, “attributable to our subsidiaries in Barbados and Trinidad. The inability to relaunch the operations in those markets due to Covid-19 restrictions, did not allow us to execute our plans. This materially affected our operations. We have since completed the planned rebranding of our operations in Trinidad to General Accident and we have commenced our plans to grow the business.”
In addition, investment income closed at $140.46 million, a 24% increase when compared with last year’s $113.73 million, while other income totalled $108.76 million, (2019: $65.29 million). Other operating expenses grew by 50% to $84.73 million when compared to $56.60 million in 2019.
As such, profit before taxation amounted to $155.59 million (2019: $231.05 million). Net Profit totalled $124.64 million for the period, a 35% drop when compared to the $192.53 million reported last year, subsequent to tax charges of $30.95 million (2019: $38.52 million). However, net profit for the quarter was $12.15 million versus net profits of $57.26 million twelve months earlier.
Profit attributable to shareholders amounted to $147.19 million (2019: $192.53 million). While for the quarter, Profit attributable to shareholders Closed at $17.28 million (2019: $57.26 million).
Total comprehensive income amounted to $146.09 million (2019: $240.73 million) year to date. While for the quarter, total comprehensive income amounted to $39.79 million (2019: $109.44 million).
As such, earnings per share for the period amounted to $0.12 (2019: $0.19) while EPS for the quarter amounted to $0.01 compared to $0.06 in 2019. The twelve months trailing EPS is $0.50. The number of shares used in our calculations amounted to 1,031,250,000 units. The stock traded at $6.05 as at November 16, 2020 with a corresponding P/E of 12.15 times.
The company states, “Like all businesses, General Accident has been impacted by Covid-19. With the uncertainty of what lies ahead, General Accident will continue to rely on strong relationships with our clients, brokers, reinsurers and employees.”
Balance Sheet at a glance:-
Total Assets increased by 32% to $10.86 billion as at September 30, 2020 from $8.25 billion a year ago. This was driven by the increase in ‘Investment Securities’ to total $4 billion (2019: $3.25 billion). Also, ‘Cash & Short-Term Investments’ contributed to the increase closing at $1.09 billion (2019: $426.74 million).
Shareholder’s Equity as at September 30, 2020 stood at $2.67 billion (2019: $2.30 billion) resulting in book value per share of $2.59 (2019: $2.23).
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