Date: August 14, 2018
Key Insurance Company Limited (KEY), for the six months ended June 30, 2018 reported a 45% growth in net premiums written from $415.45 million to $603.02 million as a result of a 43% increase in gross premium written which closed the period at $946.45 million (2017: $660.71 million). KEY noted, “The company continues to experience growth in both its non-motor and motor portfolios where gross premiums incomes increased by 31% and 27% respectively over the same period last year.” Reinsurance ceded for the period also increased for the six months to $343.43 million relative to $245.26 million in 2017. Net premiums written for the second quarter rose 58% to $341.42 million compared to $216.28 million booked in last year.
Net premiums earned increased by 52% to $533.51 million from $350.92 million in 2017. This was as a result of a loss in net change in unearned premium reserve of $69.51 million relative to a loss of $64.53 million for the same period ended June 30, 2017.
There was an underwriting loss of $116.59 million as at June 30, 2017 relative to a loss of $27.90 million. This as claims expense increased to $523.61 million for the six months ended June 30, 2018 compared to $200.25 million reported for the same period last year. According to management, “ Including in the claims expense is an actuarial adjustment of $99M. However, we remain committed to maintaining efficiency in the handling of claims by ensuring prudent reserving and settlement practices, in conjunction with strengthening of the quality of the business written.” Administrative and other expenses totaled $188.86 million for the six months, a 2% decline when compared to $192.32 million the prior year.
Reinsurance recoveries increased significantly to $74.33 million for the period (2017: $19.19 million). Commission expense rose by 44% to total $91.87 million relative $63.91 million last year, while commission income closed the period at $69.67 million (2017: $45.52 million), a 53% uptick.
Investment income totaled $24.68 million a 2% improvement relative to $24.24 million last year’s corresponding period, while other income went up to $19.81 million from $11.71 million in 2017.
Loss before taxation drastically went down to $72.10 million as at June 30, 2018 compared to a profit of $8.05 million last year. Tax charges for the period totaled 30,000, and as such net loss for period totaled $72.13 million relative to a profit of $8.02 million as at June 30, 2017. Net loss for the quarter closed at $32.00 million versus a profit of $10.77 million.
Loss per share (LPS) for the six months totaled $0.20 relative to an earnings per share of $0.02 in 2017, while LPS for the quarter totaled $0.09 compared to an earnings per share of $0.03 for the 2017 period. The trailing twelve months loss per share is $0.102. The number of shares used in the calculation was 368,460,691 units. KEY stock last traded on August 14, 2018 at $3.41.
KEY added, “There was an overall 9% reduction in operating costs as a percentage of gross premium over the same period last year. Non-operating income increased by $8M. The management and board continue to pursue the strategy agenda of growth and increase efficiency.”
Balance Sheet Highlights:
The company’s total assets amounted to $2.77 billion as at June 30, 2017 down from $2.44 million as at the corresponding period in 2017 which represents a 14% increase year over year. This was mainly as a result of a increase in “Investment securities” from $449.18 million as at June 30, 2017 to $761.07 million as at the corresponding period in 2017. In addition, Investment properties attributed to the increase to close the period at $331.37 million (2017: 185.15 million). However, Property, plant and equipment declined, moving from $312.66 million to $194.32 million as at June 30, 2018.
Total Stockholders’ Equity as at June 30, 2018 was $1.01 billion (2017: $1.08 million), resulting in a book value of $2.75 (2017: $2.93).
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