February 2, 2022
IronRock Insurance Company Limited (ROC), for the year ended December 31, 2021 posted gross premiums of $881.21 million relative $836.97 million; representing a 5% increase. Fourth-quarter gross premium amounted to $260.67 million, a 12% increase when compared to $233.76 million for the corresponding quarter of 2020.
Proportional reinsurance amounted to $634.28 million compared to $603.18 million in 2020. Excess of loss reinsurance amounted to $52.48 million (2020: $44.09 million), resulting in a net written premium of $194.45 million (2020: $189.67 million). During the quarter, net written premium amounted to $66.70 million, up 2% compared $65.46 million booked in the corresponding quarter of 2020.
Unearned premiums adjusted net amounted to $4.17 million, relative to 2020 earned premium of $3.35 million. As a result, net insurance premium revenue amounted to $190.28 million (2020: $193.05 million), while for the quarter, net premium declined slightly by 1% to $48.07 million (2020: $48.42 million).
Net claims totaled $88.92 million for the year ended December 31, 2021, down 1% when compared to 2020 $89.56 million.
Commission expenses incurred totaled $101.63 million in contrast to 2020’s $93.59 million, while commission earned grew by 16% from $148.70 million in 2020 to total $173.19 million for the year ended December 31, 2021.
ROC reported profit before operating expenses of $172.91 million, 9% up from $158.61 million booked in December 2020.
Operating expenses, for the year ended December 31, 2021, increased to $188.79 million relative to $186.07 million in the prior year. As such, underwriting loss over the year closed at $15.87 million versus a loss of $27.46 million in 2020. Moreover, for the fourth quarter, the underwriting profit was $43.31 million (2020: $37.53 million).
Investment income increased from $40.21 million in 2020 to $43.87 million for 2021. Miscellaneous income amounted $13,000 (2020: $41,000) and gain on sale of investment amounted to $9.85 million compared to $8.11 million in 2020. Foreign exchange gain amounted to $25.13 million compared to a FX gain of $11.82 million in 2020.
As a result, profit before taxation totaled $63 million compared to a profit before taxation of $32.71 million in 2020. For the fourth quarter, the company booked profit before taxation of $28.54 million relative to a profit of $9.26 million reported in 2020.
Deferred taxation charge amounted to $1.76 million (2020: tax credit of $15.12 million) and taxation was recorded at $2.11 million (2020: nil); resulting in net profit for the period under review of $59.13 million (2020: $47.95 million). While for the quarter, net profit closed at $67.98 million (2020: $61.92 million).
Earnings per share for the year totaled $0.28 (2020: EPS: $0.22); while EPS for the quarter was $0.32 (2020: $0.29). The numbers of shares used in the calculations are 214,000,000 units. The stock price as at February 1, 2022, was $3.28 with a corresponding P/E of 11.87 times.
Management noted, “the final quarter of 2021 was IronRock’s most profitable quarter to date, driven by increased profit commissions earned under our reinsurance treaties and reduced Operating expenses. The increase in our profit commission is evidence that we have maintained our risk selection and pricing discipline in a relatively soft market.”
Furthermore, “Despite these market conditions, our new business continues to grow and we gained a number of new corporate accounts during the year, however, this growth was offset, to some extent, as we walked away from a number of accounts where we felt pricing was inadequate. Growth in our personal lines portfolio continues to be robust, with sales of the Motor products we introduced in 2021 being an important contributor. It is worth noting that the accident frequency and loss ratios of these products continue to outperform our initial projections,” as per ROC.
Balance Sheet Highlights:
As of December 31, 2021, assets totaled $1.53 billion (2020: $1.40 billion) increasing by 9% year over year. This increase is mainly due to Investments increasing by $69.79 million to $635.10 million (2020: $565.31 million). Also, Reinsurance assets increase by $21.45 million to end the year at $383.98 million (2020: $362.53 million). However the movement was tempered by a decrease in Securities purchased under resale by $79.49 million to $15.28 million (2020: $94.76 million).
Shareholder’s equity closed at $625.06 million (2020: $567.10 million). This resulted in a book value per share of $2.92 (2020: $2.65).
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