ROC reports 40% increase in year end net profit

February 04, 2020

IronRock Insurance Company Limited (ROC), for the year ended December 31, 2019 posted gross premiums of $701.42 million relative $571.84 million; representing a 23% increase. Fourth quarter gross premium amounted to $226.81 million, a 19% increase when compared to $190.33 million for the corresponding quarter of 2018.

Proportional reinsurance amounted to $413.41 million compared to $321.71 million in 2018. Excess of loss premium totalled $42.17 million relative to $35.14 million in the previous year. As a result, net premium amounted to $245.84 million relative to $215 million in 2018, a 14% increase year over year. For the quarter, net premium rose 7% to $90.93 million (2018: $85.05 million).

Net earned premium revenue amounted to $221.88 million, relative to $184.22 million in 2018, following net unearned premium adjustment of $23.97 million (2018: $30.78 million).

Commission incurred totalled $75.25 million in contrast to 2018’s $60.02 million, while commission income grew by 30% from $66.31 million in 2018 to total $85.95 million.

In addition, the company booked net claims of $134.80 million relative to $72.39 million in 2018 for the year. The Company noted that the increase in claims expense is, “due primarily to increased Motor claims.”

Operating expenses for the year increased to $163.15 million relative to $160.10 million in the prior year. As such, underwriting loss worsened over the year closing at $65.38 million versus a loss of $41.98 million in 2018. Moreover, for the fourth quarter, underwriting profit was $2.31 million (2018: $848,000).

Investment income increased from $32.22 million in 2018 to $38.71 million for 2019. Gain on sale of investment amounted to $27.57 million compared to $3.16 million in 2018. Foreign exchange gain amounted to $2.98 million compared to a FX gain of $8.37 million in 2018, while other income fell to $21,000 (2018: $1 million).

As a result, profit for the year totalled $3.90 million compared to a profit of $2.77 million in 2018, a 40% improvement year over year. For the fourth quarter, the company booked profits amounting to $13.51 million relative to a profit of $10.33 million reported in 2018.

Earnings per share for the year totalled $0.02 (2018: EPS: $0.01); while EPS for the quarter was $0.06 (2018: $0.05). The numbers of shares used in the calculations are 214,000,000.00 units. The stock price as at February 03, 2020 was $3.48.

Balance Sheet Highlights:

As December 31, 2019, assets totalled $1.27 billion (2018: $1.01 million) increasing by 25% year over year. Investments contributed to this increase in the asset base by 55%. Cash and Cash equivalents also contributed to the increase with a rise of 119% to end the year at $134.14 million (2018: $61.16 million).

Shareholder’s equity closed at $547.92 million (2018: $514.71 million). This resulted in a book value per share of $2.56 (2018: $2.41).

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