KEY Insurance
Nine months ended September 30, 2017
For the nine months ended September 30, 2017 results Key Insurance Company Limited (KEY), reported a 39% increase in net premiums written to $548.18 million from $394.01 million. While for the quarter net premium amounted to $197.26 million (2016: $135.06 million).
This was as a result of a 32% increase in gross premiums written from $785.05 million to $1.03 billion. Reinsurance cede for the for the period increased 18% to close at $396.12 million (2016: $334.40 million).
KEY booked change in unearned premium reserve of $88.54 million relative to $56.64 million last year. As such, net premiums earned increased by 39% totalling $548.18 million versus $394.01 million for the comparable period in 2016. Changes in insurance reserves for the period improved from $5.37 million in 2016 to $7.28 million in 2017.
The company reported $102.36 million for commission on premium written relative to $74.22 million for the comparable period of 2016, this represents a 38% increase year over year. Commission on reinsurance ceded totalled $71.28 million relative to $61.68 million in 2016. The company indicated that, “an integral part of the company’s risk management strategy is to cede a certain percentage of insurance liabilities to reinsurers.”
Claims expense totalled $207.35 million, down 64% from the $575.47 million recorded in 2016. Key indicated, “in reviewing the adequacy of reserves as of September 2016, some of the amounts booked in prior periods were found to be no longer needed and resulted in a positive outcome.”
Reinsurance recoveries in 2016 amounted to $400.45 million in 2016, compared to a loss of $69.20 million for the nine months ended September 30, 2016.
Administration and other expenses increase for the period by 17% to $328.89 million (2016: $280.88 million). The company noted that, “cost containment is a pivotal element of this initiative. In this regard, the decision was taken to reorganize the management structure as a result, the positions of two senior managers and another six-staff member were realigned to maximize efficiency. The resulting one-off cost of $36 million were included in administrative expenses for the quarter.”
There was an underwriting loss of $71.72 million for the period compared to $67.24 million reported in 2016. Underwriting loss for the quarter amounted to $43.82 million relative to a profit of $65.91 million in 2016.
Investment income for the period amounted to $34.86 million compared to $32.89 million in 2016. Other income for the nine months amounted to $19.21 million relative to $26.65 million in 2016. Key booked $10 million for gains on revaluation of investment properties in 2016 versus nil for the nine months ended September 30, 2017.
The company reported a loss of $17.71 million for the period compared to a profit of $2.28 million for the comparable 2016 period. For the quarter net loss amounted to $25.70 million (2016: $84.38 million).
Loss per share for the period amounted to $0.05 relative to earnings per share of $0.01 in 2016. LPS for the quarter totalled $0.07 (2016: EPS $0.23). The trailing loss per share totalled $0.17. The stock is trading at $3.99 as at November 14, 2017. The number of shares used in the calculation was 368,460,863 units.
Balance Sheet Highlights:
The company’s total assets amounted to $2.40 billion as September 30, 2017 down from $2.56 billion in 2016, representing a 6% decline. To was due to a decline in cash and deposits with totalled $376.92 million (2016: $932.82 million).
Total Stockholders’ Equity as at September 30, 2017 was $1.04 billion (2016: $1.07 billion), resulting in a book value of $2.83 (2016: $2.92).
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