General Accident records $147-million net profit


General Accident records $147-million net profit

Business reporter

Wednesday, November 18, 2020

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General Accident Insurance Company Jamaica Limited (General Accident) posted on Saturday, November 14 an unaudited net profit of $147.18 million for the nine-month period ended September 30, 2020. This represents a 24 per cent decline over the previous corresponding period.

For the period under review, the company wrote gross written premium of $9.32 billion, compared to $8.94 billion for the corresponding period in 2019.

Net earned premium improved by 32 per cent to $2.02 billion while net claims charges grew by 38 per cent to $1.36 billion. Administrative expenses also increased by 37 per cent when compared to the previous corresponding period.

The Jamaican segment of the group wrote premiums amounting to $9.01 billion and contributed profit before tax of $340.6 million, while the Trinidad counterpart wrote premiums of $282 million which was eliminated by the claims and operating expenses. In addition, General Accident Barbados — a new expansion — booked premiums of $16 million.

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

General Accident for the nine-month period however made an underwriting loss of $6.19 million.

According to chairman P B Scott, while the Jamaican portfolio produced a commendable underwriting profit of $117.85 million, compared to the prior period's underwriting profit of $108.63 million, underwriting losses of $124.04 million are therefore attributable to its subsidiaries in Barbados and Trinidad.

“The inability to relaunch the operations in those markets due to COVID-19 restrictions, did not allow us to execute our plans. This materially affected our operations. We have since completed the planned rebranding of our operations in Trinidad to General Accident and we have commenced our plans to grow the business,” said chairman P B Scott.

Earnings per share for the period under review ended at $0.14, down from the $0.19 recorded in the previous corresponding period.

As at September 30, the company had a book value of $2.67 billion and an annualised return on average equity of 7.39 per cent.

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