June 28, 2022

General Accident Insurance Company Limited (GENAC), for the year ended December 31, 2021 reported gross premium written of $13.96 billion, 16% higher than the $12.04 billion reported for 2020. Reinsurance ceded also rose by 16% to close at $10.49 billion relative to $9.07 billion booked in 2020. Excess of loss reinsurance trended up by 30% to $216.99 million (2020: $167.31 million).

As a result, net premium written increased by 16% from $2.81 billion last year to $3.25 billion for the year ended December 31, 2021. Net premium written for the fourth quarter amounted to $906.63 million relative to $822.05 million booked for the corresponding period in 2020.

Net changes in unearned premiums totalled $221.21 million, 211% higher than the $71.05 million recorded last year. Consequently, net premiums earned, for the year ended December 31, 2021, grew by 11% to a total of $3.03 billion compared to $2.74 billion for the prior year. For the quarter, net premium earned totalled $802.80 million compared to $710.01 million booked for the similar quarter of 2020.

Commission income rose by 16%, year over year, from $771.22 million in 2020 to $892.86 million in 2021, while commission expenses increased by 10% from $465.63 million to $511.03 million for the period under review.

Claims expenses saw a decline of 4%, closing the period at $1.75 billion (2020: $1.82 billion), while management expenses climbed by 29% to total $1.58 billion compared to 2020’s total of $1.23 billion.

Underwriting profit for the year totalled $80.32 million, this compares to a profit of $1.45 million in 2020. The company also made an underwriting loss of $264.36 million relative to a profit of $58.36 million within the fourth quarter.

Investment income closed at $226.53 million, a decrease of 23% when compared with last year’s $293.89 million, while other income totalled $124.59 million, relative to $95.59 million in 2020. Other operating expenses grew by 41% to $164.66 million relative to $116.74 million in 2020. The Company also booked finance charges of $7.08 million for the year end (2020: $14.64 million).

Profit before taxation amounted to $259.70 million (2020: $259.54 million). Following taxes of $110.46 million (2020: $65.72 million), net profit totalled $149.24 million for the year ended December 31, 2021 a 23% decline when compared to the $193.81 million reported last year. Net loss for the quarter was $201.72 million relative to the profit of $160.33 million booked in the corresponding quarter in 2020.

Total comprehensive income amounted to $143.80 million (2020: $255.54 million) for the year ended December 31, 2021. For the fourth quarter, total comprehensive loss amounted to $289.77 million in comparison to the income of $163.31 million in 2020.

As such, earning per share for the period amounted to $0.25 (2020: $0.24), while LPS for the quarter amounted to $0.14 compared to an EPS of $0.09 in 2020. The number of shares used in our calculations amounted to 1,031,250,000 units. The stock traded at $5.78 as at June 27, 2022 with a corresponding P/E ratio of 23.40 times.

Balance Sheet at a glance:

Total assets increased by 12% to $12.50 billion as at December 31, 2021 from $11.17 billion a year earlier. ‘Cash & Short-Term Investments’ and ‘Due from Reinsurers and Co-Insurers’ contributed the most to the growth in assets with a 91% increase to $1.44 billion (2020: $756.55 million) and a 43% increase to $3.28 billion (2020: $2.30 billion), respectively.

Shareholder’s equity as at December 31, 2021 stood at $2.63 billion (2020: $2.58 billion) resulting in book value per share of $2.55 (2020: $2.50).

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.