May 11, 2022

KEY Insurance Company Limited (KEY) for the quarter ended March 31, 2022, reported a 13% increase in net premiums written to $362.14 million from $319.51 million reported in 2021.

• • The Company recorded a 20% increase in gross premiums written from $414.77 million in 2021 to $499.74 million for the quarter ended March 31, 2022.
  • Reinsurance ceded for the quarter went up 44% to close at $137.60 million (2021: $95.26 million).

KEY booked a loss in ‘change in unearned premium reserve’ of $15.39 million relative to a loss of $72.39 million last year. Notwithstanding, net premiums earned increased by 40% totalling $346.75 million versus $247.12 million for the comparable quarter in 2021.

Changes in insurance reserves for the period remained at nil similar to the corresponding quarter.

The Company reported $28.99 million for commission on reinsurance ceded relative to $20.56 million for the comparable quarter of 2021, this represents a 41% increase year over year.  Commission on premium written amounted to $47.32 million (2021: $34.65 million).

Claims expense posted an increase to $197.71 million from the $146.73 million recorded for the first three months of 2021.

Amortization of underwriting assets for the period under review remained at nil relative to the quarter ended March 31, 2021.

Administration and other expenses rose by 19% to close at $146.57 million compared to $123.41 million recorded in 2021.

There was an underwriting loss of $15.87 million for the first quarter compared to a loss of $37.11 million reported in 2021.

Investment income for the period amounted to $18.59 million, up 91% when compared to $9.71 million in 2021. While other income for the period amounted to $716,000 relative to $28.56 million in 2021. Management advised that “Investment income continues to be a critical source of Key’s total income and as such, we maintain our focus on strategically growing this income stream. Investment income grew by 88% during the quarter over the corresponding quarter ended 31 March 2021. The Company revised its Investment Policy in March 2022. One of the main objectives of the revised Policy is to obtain optimal risk adjusted return.”

Profit before taxation for the quarter closed at $3.43 million compared to a profit of $1.16 million. A taxation of $1.14 million was booked for the quarter (2021: $385,000), which resulted in a net profit for the period of $2.29 million (2021: $770,000).

Total comprehensive loss for the quarter amounted to $4.66 million, in contrast to a loss of $3.67 million recorded twelve months earlier.

Earnings per share (EPS) for the quarter amounted to $0.004 relative to EPS of $0.001 in 2021. The trailing twelve months earnings per share totalled $0.29. The number of shares used in the calculation was 559,323,101 units. KEY last traded at $$4.55 as at May 11, 2022 with a corresponding P/E of 15.72 times.

Balance Sheet Highlights:

The Company’s total assets amounted to $4.57 billion as March 31, 2022 up from $4.81 billion in 2021. The overall growth in the asset base was attributed to a 214% increase in ‘Investment Securities’ which closed at $773.10 million (2021: $246.40 million). The overall movement in the asset base was tempered by a 36% decline in ‘Due from Reinsurers’ which closed at $1.05 billion (2021: $1.63 billion) for the period under review.

Total stockholders’ equity as at March 31, 2022 was $1.07 billion (2021: $ 923.33 million), resulting in a book value of $1.92 (2021: $0.46).

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