General Accident achieves record profit

General Accident achieves record profit

Business reporter

Wednesday, February 26, 2020

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General Accident Insurance Company Jamaica Limited (General Accident) reported Friday last (February 14) record premiums and earnings for its financial year ended December 31, 2019 and expanded its reach beyond Jamaica for the first time.

“General Accident produced the largest premiums and net profits in our history last year and generated a return on average equity for shareholders of 19 per cent. While our base of property and commercial lines business remains strong, we now also have a growing share of the Jamaican motor insurance market and a presence in Trinidad,” stated chairman PB Scott in the company's financial statement.

In the latter part of September, General Accident acquired a 55 per cent stake in Motor One Insurance Company, a Trinidadian motor insurance company headquartered in Port of Spain, with a large branch network throughout Trinidad.

For the period under review the company recorded a net profit of $421.7 million, representing a 48 per cent increase when compared with the $285.4 million recorded in the previous corresponding period.

According to General Accident, the company's gross written premiums for the period under review increased by more than 21 per cent and exceeded $10 billion for the first time, while net earned premiums grew by 29 per cent to $2.1 billion.

Premium growth was driven by strength in property and other commercial lines business and the expansion of the motor business across both the General Accident and Autosmart brands.

“This growth is a function of investments in our agent network, broker relationships, and technology. General Accident maintained its long-standing culture of prudent underwriting last year. While we significantly grew our premiums, we also increased our underwriting profitability. Our loss ratio and combined ratio were 56 per cent and 90 per cent, respectively,” Scott stated.

As a result, General Accident recorded underwriting profits of $364 million in 2019, compared to the $175 million recorded in the corresponding period in 2018.

Underwriting refers to the process that a lender or other financial service uses to assess the creditworthiness or risk of a potential customer, while the premium is the amount paid periodically to the insurer by the insured for covering his/her risk.

The company also recorded a book value of $2.41 billion, compared with the $2.1 billion recorded in the prior corresponding period.

Earnings per share for the period under review ended at $0.41, an increase compared with the $0.28 recorded in the prior corresponding period.

“We look forward to working with our local partners and executive team to grow Motor One and instil General Accident's underwriting philosophy, culture, and best practices. Our strategic objective is to selectively expand General Accident's business to other markets in the English-speaking Caribbean,” Scott stated.

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