March 3, 2022
Key Insurance Company Limited (KEY) for the year ended December 31, 2021 reported net premiums written of $1.32 billion relative to net premiums written of $928.27 million recorded for the same period in 2020. This performance was due to a 35% increase in Gross Premium Written which closed the period at $1.91 billion (2020: $1.42 billion). Notably, Reinsurance Ceded for the year went up 22% to $599.10 million relative to $489.72 million for the year ended December 31, 2020. For the quarter, net premium written improved to $320.07 million, 12% up from the net premiums written of $285.43 million reported for the same quarter of 2020.
Change in earned premium reserve closed the period under review at $164.87 million, relative to an earned premium reserve of $108.18 million booked last year. As a result, net premiums earned improved to $1.15 billion relative to $820.09 million in 2020.
Claims expenses amounted to $589.77 million (2020: $563.19 million), while administrative and other expenses increased by 3% to $502.89 million (2020: $488.99 million) for the year end. Also, commission expense amounted to $160.40 million, relative to $171.33 million booked in 2020.
Commission on premium written closed at $96.61 million compared to $159.93 million for the same period of 2020. There was a surplus in unexpired risk reserves for the year which amounted to $84.59 million relative to a surplus of $31.71 million the prior year and amortization of underwriting assets stood at $323.14 million as at December 31, 2020 (2021: nil).
As a result, underwriting profit closed the year at $79.13 million compared a loss of $534.92 million experienced in 2020. As for the quarter, the Company booked an underwriting profit of $149.07 million, 336% of $34.20 million documented for 2020.
Investment income for the year totaled $59.74 million, 117% more than the $27.49 million recorded for 2020, while other income increase 215% to $98.76 million from $31.35 million booked in 2020.
There were no gain on revaluation of investment properties for the period under review. However, gain on revaluation of investment properties closed at $26.58 million for 2020.
Consequently, profit before taxation closed at $237.64 million for the year, relative to a loss of $449.50 million in 2020. There was a tax charge of $77.25 million for the year, compared to a tax credit of $149.83 million in 2020. As such, net profit for the period totaled $160.39 million relative to a loss $299.67 million for the period ended December 31, 2020. Net profit for the quarter however, closed at $147.64 million versus a profit of $58.72 million for the prior comparative quarter in 2020.
Total comprehensive income for the year amounted to $147.72 million (2020 Total comprehensive loss: $310.22 million), while comprehensive income for the quarter amounted to $127.47 million (2020: $71.97 million).
Earnings per share (EPS) for the twelve months totaled $0.29 relative to a loss per share of $0.54 in 2020, while EPS for the quarter totaled $0.26 compared to an EPS of $0.10 in 2020. The number of shares used in the calculation was 559,323,101 units. KEY stock last traded on March 3, 2022 at $4.65 with a corresponding P/E of 16.22 times.
Balance Sheet Highlights:
The Company’s total assets amounted to $4.48 billion as at December 31, 2021, 54% above the $2.91 billion as at the corresponding period in 2020. This was mainly as a result of an increase in ‘Cash and deposits’ to $1.47 billion (2020: $745.18 million) and ‘Due from reinsurers’ amounting to $1.06 billion (2020: $363.95 million).
Total Shareholders’ Equity as at December 31, 2021 closed at $1.07 billion (2020: $258.98 million), thus resulting in a book value of $1.92 (2020: $0.46).
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 affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.