May 17, 2019
KEY Insurance Company Limited (KEY) for the quarter ended March 31, 2019, reported a 4% increase in net premiums written to $272.36 million from $261.60 million in 2018. There was a 5% decrease in gross premiums written from $387.66 million to $368.71 million. KEY noted this was, “consistent with our underwriting strategy to achieve our targeted risk profile” Reinsurance ceded for the for the quarter fell 24% to close at $96.34 million (2018: $126.06 million).
KEY booked a gain in ‘change in unearned premium reserve’ of $26.67 million relative to a loss of $9.30 million last year. As such, net premiums earned increased by 19% totalling $299.04 million versus $252.30 million for the comparable quarter in 2018. Changes in insurance reserves for the period amounted to $1.78 million.
The company reported $15.45 million for Commission on reinsurance ceded relative to $22.51 million for the comparable period of 2018, this represents a 31% decrease year over year. Commission on premiums written recorded a 7% decline to $32.52 million relative to $35 million in 2018.
Claims expense posted a marginal increase to $279.06 million from the $278.40 million recorded for the first three month of 2018. Management stated, “The company’s claims expense has remained at the same level as that at 31 March 2018 reversing the previous periods increasing trend. Notwithstanding, we remain committed to maintaining efficiency in the handling of claims by ensuring prudent reserving and settlement practices.”
A gain of $47.77 million (2018: $74.13 million) was recorded for reinsurance recoveries, while administration and other expenses inched up 9% to close at $98.12 million compared to $89.83 million recorded in 2018. According to management, “There was an overall increase of $7.7 million in operating costs for the period, due to non-recurring professional fees in the 1st quarter of 2019 in comparison to that obtained in the 1st quarter of 2018. Cost containment remains a key strategic focus for the company.”
There was an underwriting loss of $45.67 million for the first quarter compared to a loss of $55.12 million reported in 2018.
Investment income for the period amounted to $17.31 million, up 43% when compared to $12.11million in 2018. Other income for the period amounted to $26,000 relative to $2.91 million in 2018.
Net loss before taxation for the quarter closed at $28.34 million compared to a loss of $40.10 million. No taxes were incurred for the quarter (2018: $30,000), which resulted in a net loss for the period of $28.34 million (2018: $40.13 million).
Total comprehensive loss for the quarter amounted to $37.32 million, in contrast to a loss of $42.34 million.
Loss per share (LPS) for the quarter amounted to $0.08 relative to earnings per share of $0.11 in 2018. The trailing twelve months earnings per share totalled $0.41. KEY last traded at $3.90 as at May 17, 2019. The number of shares used in the calculation was 368,460,691 units.
Balance Sheet Highlights:
The company’s total assets amounted to $2.57 billion as March 31, 2019 up from $2.56 billion in 2018. The overall growth in the asset base was attributed to a 54% increase in investment securities which closed at $1.19 billion (2018: $773.97 million). The overall movement in the asset base was tempered by a 75% decline in cash and cash equivalents which closed at $106.22 million (2018: $413.76 million).
Total Stockholders’ Equity as at March 31, 2019 was $851.48 million (2018: $1.05 billion), resulting in a book value of $2.31 (2018: $2.86).
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