GENAC reports 34% increase in nine months net profit

November 15, 2019

General Accident Insurance Company Limited (GENAC), for the nine months ended September 30, 2019, reported Gross premium written of $8.94 billion, 21% higher than the $7.40 billion reported for 2018. Excess of loss reinsurance went up to $99.63 million, from $70.38 million reported in 2018 while Reinsurance ceded amounted to $7.20 billion relative to $6.01 billion in 2018, a 20% increase year over year. As a result, net premium written increased by 25% from $1.32 billion last year to $1.64 billion in 2019. Net premium written for the third quarter amounted to $595.98 million relative to $478.73 million booked for the corresponding period in 2018.

Net changes in unearned premiums totalled $109.94 million, 9% lower than the $120.45 million recorded the previous year. Consequently, net premiums earned grew by 28% to a total of $1.53 billion compared to $1.20 billion for the same period last year. For the quarter, net premium earned totalled $546.20 million compared to $430.90 million booked for the similar quarter of 2018.

Commission income grew by 12%, year over year, from $494.97 million in 2018 to $554.56 million in 2019, while commission expenses also went up by 22% from $312.28 million in 2018 to $380.09 million in 2019.

Claims expenses saw an increase of 14%, closing the period at $987.60 million (2018: $865.94 million), while management expenses climbed by 14% to total $631.40 million (2018: $553.88 million).

Net change in commission totalled $18.30 million for the nine months compared to $11.26 million booked in 2018.

Consequently, Underwriting profit for the period totalled of $108.64 million, this compares to a loss of $27.70 million in 2018. The company made an underwriting profit of $27.67 million for the third quarter when compared to a loss of $20.02 million in 2018.

In addition, investment income closed at $113.73 million, a 50% decrease when compared with last year’s $228.73 million, while other income totalled $65.29 million, (2018: $4.51 million). Other operating expenses grew by 74% to $56.60 million when compared to $32.46 million in 2018.

As such, profit before taxation amounted to $231.05 million (2018: $173.08 million). Net Profit totalled $192.53 million for the period, a 34% uptick when compared to the $144.18 million reported last year, subsequent to tax charges of $38.52 million. However, net profit for the quarter was $57.26 million, a 17% rise versus the same period of 2018 which had net profits of $48.73 million.

Total comprehensive income amounted to $240.73 million (2018: $126.15 million), following changes in fair value of equity investments at fair value through other comprehensive income of $48.19 million (2018: nil).

As such, earnings per share for the period amounted to $0.19 (2018: $0.14) while EPS for the quarter amounted to $0.06 compared to $0.05 in 2018. The twelve months trailing EPS is $0.33. The number of shares used in our calculations amounted to 1,031,250,000 units. The stock traded at $7.26 as at November 14, 2019.

The Company stated, “we are pleased to advise that in the latter part of September 2019, we acquired 55% of Motor One Insurance Company Limited, a Trinidadian motor insurer. The consolidated impact for the 14 days are not included, but will be reflected in the fourth quarter report.”

Balance Sheet at a glance:-

Total Assets increased by 23% to $8.25 billion as at September 30, 2019 from $6.70 billion a year ago. This was driven by the increase in ‘Investment Securities’ to total $3.25 billion (2018: $2.24 billion). Also, ‘Due from reinsurers and co-insurers’ contributed to the increase closing at $2.09 billion (2018: $1.49 billion).

Shareholder’s Equity as at September 30, 2019 stood at $2.30 billion (2018: $2.04 billion) resulting in book value per share of $2.23 (2018: $1.98).

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