GENAC reports 26% increase in Gross Premium

Date: April 9, 2018

Kindly see audited results for General Accident Insurance Company Limited below:

General Accident Insurance Company Limited (GENAC)

For the year ended December 31, 2017 reported Gross premium written of $7.11 billion, 26% higher than the $5.65 billion reported for 2016. Reinsurance ceded rose 28% to close at $5.56 billion relative to $4.33 billion booked in 2016. Excess of loss reinsurance trended down by 6% to $91.36 million (2016: $96.78 million). As a result, net premium written increased by 20% from $1.22 billion last year to $1.46 billion. Net premium written for the fourth quarter amounted to $416.04 million relative to $334.89 million booked for the corresponding period in 2016.

Net changes in unearned premiums totaled $129.44 million, 52% higher than the $84.89 million recorded last year. Consequently, net premiums earned grew by 17% to a total of $1.33 billion compared to $1.14 billion for the prior year. For the quarter, net premium earned totaled $364.78 million compared to $282.28 million booked for the similar quarter of 2016.

Commission income grew by 62%, year over year, from $350.75 million in 2016 to $568.04 million in 2017, while commission expenses increased by 40% from $194.94 million to $273.59 million.

Claims expenses saw an increase of 46%, closing the period at $1.09 billion (2016: $746.07 million), while management expenses climbed by 14% to total $572.29 million compared to the 2016 total of $500.39 million.
GENAC noted, “ The industry suffered from steep decline in property rates which significantly impacted the underwriting performance. Our high claim cost along with declining premium rates has resulted in us suffering an underwriting loss for the first time in 10 years.”

Underwriting loss for the year totaled of $35.53 million, this compares to a profit of $45.61 million in 2016.

Investment income closed at $328.38 million, a 0.50% increase when compared with last year’s $326.76 million, while other losses totaled $25.83 million, relative to an income of $56.32 million in 2016. Other operating expenses grew by 27% to $30.95 million relative to $24.44 million in 2016.

Profit before taxation amounted to $236.08 million (2016: $404.24 million). Following taxes of $14.84 million (2016: $17.36 million), net profit totaled $221.24 million for the period, a decline of 43% compared to the $386.88 million reported last year.

Total comprehensive income amounted to $173.35 million (2016: $364.13 million) for the year ended December 31, 2017, a 52% decline.

As such, Earning per share for the period amounted to $0.21 (2016: $0.38) while EPS for the quarter amounted to $0.14 compared to $0.07 in 2016. The stock traded at $2.95 as at April 6, 2017. The number of shares used in our calculations amounted to 1,031,250,000 units.

GENAC noted, “ While we are disappointed with the year’s underwriting loss, we are tentatively optimistic our underwriting performance next year will improve given our projected business mix, tightened underwriting process and indication that rates are beginning to trend up.”

Balance Sheet at a glance:-

Total Assets increased by 16% to $5.70 billion as at December 2017 from $4.93 billion a year earlier. “Due from reinsurers and co-insurers” contributed the most to the growth in assets with a 43% increase to $1.09 billion relative to $759.94 million in 2016.

Shareholder’s Equity as at December 2017 stood at $1.94 billion (2016: $1.96 billion) resulting in book value per share of $1.88 (2016: $1.90).

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.

2018-04-09T15:12:48+00:00