Date: May 14, 2018
Key Insurance Company Limited (KEY), for the first three months ended March 31, 2018 reported a 31% increase in net premiums written from $199.17 million to $261.60 million. This was as a result of a 31% increase in gross premiums written from $295.93 million to $387.66 million. Reinsurance cede for the first quarter increased 30% to close at $126.06 million (2017: $96.76 million).
KEY booked change in unearned premium reserve of $9.30 million relative to $30.98 million last year. The company noted that that growth was mainly from, “both non-motor and motor portfolios, but a significant increase in the size of the motor portfolio.” Also, “Non-motor and motor gross premiums increased by 24% and 34% respectively over the same period last year.”
As such, net premiums earned increased by 50% from $168.19 million for the first three months of 2017 versus $252.30 million for the comparable period in 2018. Changes in insurance reserves for the quarter worsened from a surplus of $3.43 million in 2017 to a deficit of $826,000, while commission income rose 23% to $22.51 million (2017: $18.33 million).
The company reported nil for commission expense relative to $27.61 million year over year. Claims expense totalled $278.40 million, up 182% from the $98.60 million recorded in 2017. Key indicated that they are, “committed to maintain efficiency in the handling of claims by ensuring prudent reserving and settlement practices.”
Administration and other expenses decreased for the quarter by 4% to $89.83 million (2017: $93.20 million). There was an underwriting loss of $55.12 million for the quarter compared to $18.48 million reported in 2017. The company stated , “senior management has committed to the reduction of operating costs as top priority and have embarked upon a strategic process of identifying and initiating cost cutting measures. As a result, in the first quarter of the year the commencement of several projects aimed at decreasing costs have been implemented.”
Key booked a 20% decline in investment income to $12.11 million (2017: $15.15 million), while other income rose by 377% to $2.91 million relative to $610,000.
The company reported a loss before taxation of $40.10 million for the period compared to a loss of $2.72 million for the comparable 2017 period.
Following tax credit of $30,000 versus a tax credit of $1.62 million a year earlier, the company booked a loss for the quarter of $40.13 million compared to a loss of $1.10 million in 2017.
Total Comprehensive Income deteriorated drastically from $30.05 million for the first quarter of 2017 to a loss of $42.34 million in 2018.
Loss per share for the first quarter amounted to $0.109 relative to earnings per share of $0.003 in 2016. The trailing earnings per share totalled $0.01. The number of shares used in the calculation was 368,460,691 units. KEY’s stock price closed the trading period on May 14, 2018 at $4.00.
Balance Sheet Highlights:
The company’s total assets amounted to $2.56 billion as March 31, 2018 up from $2.35 billion as at March 31, 2017, representing a 9% increase. Investment securities’ and ‘Investment properties’ both contributed to the increased figure with a 42% and 79% increase year over year. Investment securities amounted to $773.97 million (2017: $546.43 million), while Investment properties stood at $331.37 million (2017: $185.15 million), an increase of $146.22 million.
Total Stockholders’ Equity as at March 31, 2018 was $1.052 billion (2017: $1.048 billion), resulting in a book value of $2.86 (2016: $2.78).
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