General Accident underwriting profit plunged in 4Q
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General Accident underwriting profit plunged in 4Q
GENERAL Accident Insurance Company increased its gross written premiums by 23 per cent.
However, higher management and commission expenses dragged down the company's underwriting profit by 56 per cent in the insurer's fourth quarter.
Underwriting profit, which is the income generated from the company's core business of underwriting insurance, moved from $52.9 million during the three months ended December 31, 2012, to $23.1 million during the last three months of 2013.
The company's gross premium written moved from $547.8 million during the comparative quarter in the prior year to $674.5 during the quarter under review, while net premiums written was $262.7 million, up from $259.4 million in the prior year.
Net premiums earned was $276.3 million, just in line with the premiums earned during the comparative period and commission income, earned from reinsurers, was up from $93.6 million to $94.9 million.
Invariably, commission expense, paid to the reinsurer, grew by 96 per cent, moving up from $39.5 million in the fourth quarter 2012, and management expense increased by eight per cent, down from $111.5 million in the comparative quarter to $120.5 million during the quarter under review as a result of an increase in the number of staff to help improve efficiency.
On the other hand, claims expense fell by nine per cent, moving from $166 million in the previous year to $150 million in the quarter under review.
The company, which listed on the Jamaica Junior Stock Exchange in 2012, has a portfolio mix of seven classes, with property and motor being the primary ones.
Investment income during the quarter under review was $68.2 million, or more than tenfold the income earned during the comparative quarter in the prior year. Other income fell 95 per cent year-over-year from $50.8 million to $2.1 million.
General Accident generated investment income of $286 million for the 12 months ended December 31, 2013 and recorded a small unrealised gain in the fair value of its holdings.
"We made a 12.9 per cent return on our investment portfolio this year, far exceeding both inflation and the returns on our investment benchmarks," the company said. "Once again, this improved investment performance was the result of increases in our float and the more active and efficient management of our capital in the face of low interest rates."
Net profit for the quarter under review was $85.3 million, down from $98.4 million in the comparative period in the prior year.