October 20, 2020
IronRock Insurance Company Limited (ROC), for the nine months ended September 30, 2020 posted gross premium of $603.21 million relative $474.61 million; this represents a 27% increase year over year. For the third quarter gross premium rose by 16% to total $181.23 million compared to $156.06 million in 2019.
Proportional reinsurance amounted to $445.64 million compared to $284.08 million in 2019, while excess of loss reinsurance closed the period at $33.33 million (2019: $35.62 million), 6% down from the prior year’s corresponding period.
As a result, net premium revenue amounted to $124.24 million relative to $154.91 million in 2019, a 20% decrease. While for the quarter, net premium revenue decreased by 28% to close at $34.29 million (2019: $47.38 million).
Net earned premium, for the nine months ended September 30, 2020, amounted to $144.64 million (2019: $158.65 million) with net unearned premium adjustment of $20.40 million (2019: $3.74 million). During the quarter, net earned premium amounted to $46.80 million (2019: $57.31 million), after unearned premium adjustment of $12.51 million (2019: $9.93 million) was added.
Commission incurred totalled $67.75 million in contrast to $54.32 million in 2019, while commission earned grew by 48% from $50.65 million in 2019 to total $74.86 million for the period under review.
Net claims declined by 24% from $103.80 million in 2019 to $78.62 million for the nine months ended September 30, 2020. In addition, operating expenses went up by 15% to $137.19 million (2019: $118.87 million). As such, underwriting loss for the period amounted to $64.07 million relative to a loss of $67.69 million a year earlier. Underwriting loss for the quarter amounted to $18.66 million compared to the underwriting loss of $30.01 million reported in 2019.
ROC recorded $51.03 million for total other income, relative to $58.07 million booked for the nine months ended September 2019, the Company noted that this was as a result of “a significant reduction in Gains on the Sale of Investments, which is a direct consequence of the effect of COVID-19 on local and international financial markets.” Of this:
- Investment income amounted to $30.86 million relative to $28.16 million in September 2019.
- Foreign exchange gain amounted to $11.91 million versus $5.02 million in September 2019.
- Gain on sale of investment amounted to $8.11 million versus $24.88 million in September 2019.
- Bank interest amounted to $156,000 versus 18,000 booked September 2019.
As a result, the Company recorded a loss before taxes of $13.04 million compared to a loss of $9.62 million the prior period, while profit for the quarter totalled $4.57 million relative to a profit of $1.60 million for the comparable quarter in 2019. Since there was no tax recorded for the period, net loss amounted to $13.04 million (2019: net loss of $9.62 million). For the quarter, net profit closed at $4.57 million compared to profit of $1.60 million in the same period last year.
Loss per share accumulated to $0.06 (2019 LPS: $0.05), while for the quarter, EPS amounted to $0.021 (2019 EPS: $0.008). The trailing twelve months loss per share amounted to $0.008. The stock price as at October 20, 2020 was $2.51. The numbers of shares used in the calculations are 214,000,000.00 units.
Management noted, “During the financial quarter ended 30 September 2020, the number of COVID-19 cases and deaths in Jamaica began to rise at an unprecedented rate. The primary effect on our operations has been a slow-down in our revenue growth. Our experience is that brokers and their clients have been less willing to re-broke large commercial programs, as most parties prefer in-person meetings with new insurers – but these meetings are now associated with the risk of COVID-19 exposure.”
Furthermore, ROC also stated that, “We have therefore renewed our focus on building and maintaining a profitable direct client portfolio. We have launched several new motor insurance products and the early response from the market has been promising. Client engagement on our digital platforms has also continued to grow, with our September 2020 showing the highest level of online client engagement ever. Looking ahead we are excited to build a truly modern insurance service for the digital age.”
Balance Sheet Highlights:
As at September 30, 2020, ROC’s assets totalled $1.36 billion (2019: $1.11 billion), 22% greater than the amount booked during 2019. ‘Reinsurance Assets’ and ‘Securities purchased under resale’ contributed to the increase in the asset base closing the period at $382.98 million (2019: $197.29 million) and $171.33 million (2019: nil), respectively. The movement was offset by ‘Investments’ which decreased by $131.15 million to $492.27 million (2019: $623.42 million).
Shareholder’s equity closed at $495.34 million (2019: $539.73 million) which resulted in a book value per share of $2.31 (2019: $2.52).
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