Reports nine months net profit of $12.75 million

Key Insurance finances continues to improve, evidence that the overhaul of the company’s underwriting practices in the second quarter of 2020 is working.

For the nine months ended September 30, 2021, profit before taxation closed at $19.13 million, relative to a loss of $538.04 million in 2020. There was a tax charge of $6.38 million for the period under review versus tax credit of $179.65 million for 2020.

Consequently, net profit for the three quarters of 2021 totalled $12.75 million relative to the loss of $358.39 million for the period ended September 30, 2020. Net profit for the September quarter closed at $10.94 million versus a profit of $5.65 million for the prior comparative quarter.

Total comprehensive income for the nine months amounted to $20.26 million relative to the loss of $382.20 million a year earlier. Comprehensive income for the September quarter amounted to $16.58 million relative to the loss of $1.73 million in 2020.

Management pleased with the financial turnaround

The management has highlighted that while it is pleased with its strong performance over the past five quarters, the team remains committed to and focused on continuing to execute its strategic initiative which has provided positive results to date.

The management team noted that “it began its strategic focus of overhauling the company’s underwriting practices in the second quarter of 2020 and have since seen improvement in the company’s performance as illustrated by the results for the nine-month period September 2021. This reflects improvement in the underwriting performance of 88 per cent over the corresponding period in 2020”.

During the three quarter of 2021, there was a 55 per cent increase in net premiums written to $995.79 million compared to $642.85 million recorded in 2020. There was an eight per cent increase in reinsurance ceded, which closed at $434.57 million compared to the $402.22 million booked in 2020.

Gross premium written for the nine month period rose 37 per cent to $1.43 billion relative to $1.05 billion for the period ended September 30, 2020. For the quarter, net premium written went up 27 per cent closing at $330.67 million, up from $259.93 million in 2020.

Change in unearned premium reserve related to current year gross closed the period under review at a deficit of $134.60 million, relative to a deficit of $43.65 million booked last year. As a result, net premiums earned increased by 44 per cent to $861.19 million from $599.20 million in 2020.

For the third quarter, net change in unearned premium reserve declined to deficit of $17.66 million relative to a deficit of $55.62 million reported in the prior comparable year, leading to a net premium earned of $313.01 million compared to $204.30 million in 2020.

Marginal increase in claims expenses

Claims expenses increased by eight per cent to $527.39 million from $490.47 million reported for the same period last year. Likewise, administrative and other expenses increased by 10 per cent to $360.13 million (2020: $326.90 million) for the current nine months period.

Commission on premium written closed at $115.19 million compared to $89.19 million for the same period of 2020. Commission on reinsurance ceded rose 17 per cent to $71.58 million from $61.37 million incurred for the nine months ended September 2020.

Underwriting loss closed the period at $69.94 million compared a loss of $569.13 million experienced last year. As for the quarter, underwriting loss amounted to $12.14 million compared to $2.57 million booked in 2020.

Investment income totalled $37.69 million, 131 per cent increase from $16.31 million recorded for last year’s corresponding period, while other income grew 247 per cent to $51.38 million from $14.79 million booked in 2020’s corresponding period.

The company’s total assets amounted to $5.19 billion as at September 30, 2021, 20 per cent up from $4.33 billion as at the corresponding period in 2020. This was mainly as a result of a 347 per cent increase in ‘Investment securities’ to $952.78 million (2020: $213.03 million) and a 30 per cent uptick in ‘Cash and Deposits’ amounts to $1.20 billion (2020: $924.04 million).