November 11, 2021
Key Insurance Company Limited (KEY) for the nine months ended September 30, 2021 reported a 55% increase in net premiums written to $995.79 million relative to $642.85 million recorded for the same period in 2020. Notably there was an 8% increase in reinsurance ceded which closed the period at $434.57 million (2020: $402.22 million), while gross premium written for the period rose 37% to $1.43 billion relative to $1.05 billion for the period ended September 30, 2020. For the quarter, net premium written went up 27% closing at $330.67 million (2020: $259.93 million).
Change in unearned premium reserve related to current year gross closed the period under review at a deficit of $134.60 million, relative to a deficit of $43.65 million booked last year. As a result, net premiums earned increased by 44% to $861.19 million from $599.20 million in 2020. While for the third quarter, net change in unearned premium reserve decline to deficit of $17.66 million relative to a deficit of $55.62 million reported in the prior comparable year. Which led to a net premium earned of $313.01 million (2020: $204.30 million).
Claims expenses increased by 8% to $527.39 million from $490.47 million reported for the same period last year. Likewise, administrative and other expenses increased by 10% to $360.13 million (2020: $326.90 million) for the current nine months period.
Commission on premium written closed at $115.19 million compared to $89.19 million for the same period of 2020. Commission on reinsurance ceded rose 17% to $71.58 million from $61.37 million incurred for the nine months ended September 2020.
Underwriting loss closed the period at $69.94 million compared a loss of $569.13 million experienced last year. As for the quarter, underwriting loss amounted to $12.14 million (2020: $2.57 million).
Investment income totalled $37.69 million, 131% increase from $16.31 million recorded for last year’s corresponding period, while other income grew 247% to $51.38 million from $14.79 million booked in 2020’s corresponding period.
Profit before taxation closed at $19.13 million for the period ended September 30, 2021, relative to a loss of $538.04 million in 2020. There was a tax charge of $6.38 million for the period versus tax credit of $179.65 million for the comparable period in 2020. Consequently, net profit for the period totalled $12.75 million relative to the loss of $358.39 million for the period ended September 30, 2020. Net profit for the quarter closed at $10.94 million versus a profit of $5.65 million for the prior comparative quarter.
Total comprehensive income for the nine months amounted to $20.26 million relative to the loss of $382.20 million a year earlier. Comprehensive income for the quarter amounted to $16.58 million relative to the loss of $1.73 million in 2020.
Earnings per share (EPS) for the nine months totalled $0.03 relative to a loss per share (LPS) of $0.97 in 2020, while EPS for the quarter totalled $0.03 compared to a EPS of $0.02 in 2020. The trailing twelve months EPS is $0.13. The number of shares used in the calculation was 559,323,101 units. KEY stock last traded on November 05, 2021 at $4.12 with a corresponding P/E ratio of 32.24 times.
KEY highlighted, “the Company, while pleased with its strong performance over the past five quarters, remains committed to and focused on continuing to execute its strategic initiative which have provided positive results to date.”
Management added, “the management team began its strategic focus of overhauling the Company’s underwriting practices in the second quarter of 2020 and have since seen improvement in the Company’s performance as illustrated by the results for the nine-month period September 2021. This reflects improvement in the underwriting performance of 88% over the corresponding period in 2020.”
Balance Sheet Highlights:
The company’s total assets amounted to $5.19 billion as at September 30, 2021, 20% up from $4.33 billion as at the corresponding period in 2020. This was mainly as a result of a 347% increase in ‘Investment securities’ to $952.78 million (2020: $213.03 million) and a 30% uptick in ‘Cash and Deposits’ amounting to $1.20 billion (2020: $924.04 million).
Total Shareholders’ Equity as at September 30, 2021 closed the period at $947.25 million (2020: $182.57 million), thus resulting in a book value of $2.57 (2020: $0.50).
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