Date: February 14, 2018
General Accident Insurance Company Limited (GENAC), for the year ended December 31, 2018 reported Gross premium written of $8.74 billion, 23% higher than the $7.11 billion reported for 2017. According to GENAC, “The development of our premium volume was driven by strong growth in the motor product.” Reinsurance ceded rose 21% to close at $6.75 billion relative to $5.56 billion booked in 2017. Excess of loss reinsurance trended up by 40% to $127.75 million (2017: $91.36 million).
As a result, net premium written increased by 28% from $1.46 billion last year to $1.86 billion. Net premium written for the fourth quarter amounted to $543.67 million relative to $416.04 million booked for the corresponding period in 2017.
Net changes in unearned premiums totaled $231.86 million, 79% higher than the $129.44 million recorded last year. Consequently, net premiums earned grew by 23% to a total of $1.63 billion compared to $1.33 billion for the prior year. For the quarter, net premium earned totaled $432.26 million compared to $364.78 million booked for the similar quarter of 2017.
Commission income grew by 52%, year over year, from $492.46 million in 2018 to $747.33 million in 2018, while commission expenses increased by 34% from $310.73 million to $415.94 million.
Claims expenses saw an decrease of 5%, closing the period at $1.03 billion (2016: $1.09 billion), while management expenses climbed by 40% to total $803.09 million compared to the 2017 total of $572.29 million. Net change in commission totaled $51.34 million for the year compared to $112.71 million in 2017.
Underwriting profit for the year totaled of $181.92 million, this compares to a loss of $35.53 million in 2017. The company also made an underwriting profit of $209.62 million (2017: 10.91 million) within the fourth quarter.
Investment income closed at $199.22 million, a 39% decline when compared with last year’s $328.38 million, while other income totaled $17.22 million, relative to an losses of $25.83 million in 2017. Other operating expenses grew by 42% to $43.89 million relative to $30.95 million in 2017. GENAC noted, “Continues investments to recruit and retain talent and a new campaign to promote our motor offerings, accounted for most of the increase.”
Profit before taxation amounted to $354.47 million (2017: $236.08 million). Following taxes of $59.14 million (2017: $14.84 million), Net profit totaled $295.33 million for the period, an increase of 33% compared to the $221.24 million reported last year. Net profit for the quarter was $151.22 million, 7% less than the same period of 2017 which had net profits of $162.04 million.
Total comprehensive income amounted to $303.27 million (2017: $173.35 million) for the year ended December 31, 2018, a 75% uptick.
As such, earning per share for the period amounted to $0.29 (2017: $0.21) while EPS for the quarter amounted to $0.15 compared to $0.16 in 2017. The stock traded at $4.01 as at February 14, 2018. The number of shares used in our calculations amounted to 1,031,250,000 units.
Balance Sheet at a glance:-
Total Assets increased by 22% to $6.93 billion as at December 31, 2018 from $5.69 billion a year earlier. ‘Investment Securities’ contributed the most to the growth in assets with a 32% increase to $2.45 billion relative to $1.85 billion in 2017. However this was offset by the decline ‘Cash & Short Term Investments’ by $315.67 million to close the period at $668.36 million (2017: $984.04 million).
Shareholder’s Equity as at December 31, 2018 stood at $2.07 billion (2017: $1.92 billion) resulting in book value per share of $2.01 (2017: $1.86).
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.