GENAC reports 33% increase in year end net profits

Date: February 14, 2018

General Accident Insurance Company Limited (GENAC), for the year ended December 31, 2018 reported Gross premium written of $8.74 billion, 23% higher than the $7.11 billion reported for 2017. According to GENAC, “The development of our premium volume was driven by strong growth in the motor product.” Reinsurance ceded rose 21% to close at $6.75 billion relative to $5.56 billion booked in 2017. Excess of loss reinsurance trended up by 40% to $127.75 million (2017: $91.36 million).

As a result, net premium written increased by 28% from $1.46 billion last year to $1.86 billion. Net premium written for the fourth quarter amounted to $543.67 million relative to $416.04 million booked for the corresponding period in 2017.

Net changes in unearned premiums totaled $231.86 million, 79% higher than the $129.44 million recorded last year. Consequently, net premiums earned grew by 23% to a total of $1.63 billion compared to $1.33 billion for the prior year. For the quarter, net premium earned totaled $432.26 million compared to $364.78 million booked for the similar quarter of 2017.

Commission income grew by 52%, year over year, from $492.46 million in 2018 to $747.33 million in 2018, while commission expenses increased by 34% from $310.73 million to $415.94 million.

Claims expenses saw an decrease of 5%, closing the period at $1.03 billion (2016: $1.09 billion), while management expenses climbed by 40% to total $803.09 million compared to the 2017 total of $572.29 million. Net change in commission totaled $51.34 million for the year compared to $112.71 million in 2017.

Underwriting profit for the year totaled of $181.92 million, this compares to a loss of $35.53 million in 2017. The company also made an underwriting profit of $209.62 million (2017: 10.91 million) within the fourth quarter.

Investment income closed at $199.22 million, a 39% decline when compared with last year’s $328.38 million, while other income totaled $17.22 million, relative to an losses of $25.83 million in 2017. Other operating expenses grew by 42% to $43.89 million relative to $30.95 million in 2017. GENAC noted, “Continues investments to recruit and retain talent and a new campaign to promote our motor offerings, accounted for most of the increase.”

Profit before taxation amounted to $354.47 million (2017: $236.08 million). Following taxes of $59.14 million (2017: $14.84 million), Net profit totaled $295.33 million for the period, an increase of 33% compared to the $221.24 million reported last year. Net profit for the quarter was $151.22 million, 7% less than the same period of 2017 which had net profits of $162.04 million.

Total comprehensive income amounted to $303.27 million (2017: $173.35 million) for the year ended December 31, 2018, a 75% uptick.

As such, earning per share for the period amounted to $0.29 (2017: $0.21) while EPS for the quarter amounted to $0.15 compared to $0.16 in 2017. The stock traded at $4.01 as at February 14, 2018. The number of shares used in our calculations amounted to 1,031,250,000 units.

Balance Sheet at a glance:-

Total Assets increased by 22% to $6.93 billion as at December 31, 2018 from $5.69 billion a year earlier. ‘Investment Securities’ contributed the most to the growth in assets with a 32% increase to $2.45 billion relative to $1.85 billion in 2017. However this was offset by the decline ‘Cash & Short Term Investments’ by $315.67 million to close the period at $668.36 million (2017: $984.04 million).

Shareholder’s Equity as at December 31, 2018 stood at $2.07 billion (2017: $1.92 billion) resulting in book value per share of $2.01 (2017: $1.86).

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