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General Accident's net income jumps by 41%
21 August 2013

General Accident's net income jumps by 41%

General Accident Insurance Company Jamaica saw its net profit increase by 41 per cent.

Profit for the three months ended June 2013 was $80 million, up from $53.9 million during the corresponding period.

The improved performance reflected higher gross premium revenue and better underwriting profit.

Underwriting profit, which is the income generated from the company's core business of underwriting insurance, was $32 million for the three months ended June 2013, up from $16 million during the corresponding period.

The company, which listed on the Jamaica Junior Stock Exchange last year, has a portfolio mix of seven classes, with property and motor being the primary one

Improvements in net commission contributed to the increase in profit from General Accident's core business - commercial, property and motor, which saw healthy organic growth, the company said.

Commissions expense improved, to $6.5 million during the three months ended June 2013, down from $78 million during the comparative period.

Commission income earned from reinsurers grew by two per cent to $84 million during the review period, moving from $82 million in the corresponding period last year.

The company executed some facultative transactions on behalf of large domestic and multinational clients, according to the general insurer.

General Accident said it did not take up the significant risks that were associated with the large domestic and multinational clients.

But claims expenses increased by 33 per cent to $157 million during the quarter under review, up from $117 million.

Its gross premiums written for the third quarter 2013 was $2 billion, 23 per cent more than the same period last year. While net premiums written during the quarter under review was four per cent higher, moving from $265 million to $254 million.

Investment income for the period under review increased by 33 per cent to $52 million, down from $39 million to $52 million.

During the six months ended June, the company posted $145 million in investment income; this is an increase of 68 per cent compared to $86 million last year.

"This represents an annualised return on our average investment portfolio of 12 per cent, well in excess of inflation and the returns on benchmark Government of Jamaica fixed-income securities," the company said.

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