Chairman of Key Insurance Company Limited, Natalia Gobin-Gunter, is crediting the company’s improved financial results for the third quarter, ended September 30, 2019 to two key features, that of improved strategic underwriting enabled by robust risk management and a reduction in gross claims expense.
The 22% operating performance improvement she said was comparable to that of the second quarter that ended on June 30, 2019.
Commenting further she noted that their underwriting strategy to achieve their targeted risk profile business, resulted in reduced gross premium income of 36% over last year’s third quarter results.
Premium income recorded during the three months ended September 30, 2019 stood at $333 million in contrast with the second quarter of 2019 which was $434 million.
This performance equates to a $1.135 billion in gross premium written for the nine months ended September 30, 2019.
Additionally, she said that the gross premiums written are a realisation of the correction of the aggressive motor business growth at KEY in line with the industry 24% year over year (YOY) growth over the last five years where they positioned the company to allow more customers to experience the KEY brand.
The financial year 2015 showed that they wrote premium of $472 million and $488 million in motor and non-motor respectively.
The KEY motor brand growth projected to year end 2019 will result in a YOY growth of 29% for the five-year period 2015-2019 for the motor business.
However, non-motor premium will revert to its 2015 levels due to the extremely competitive nature of this segment of insurance.
The second component of the third quarter loss performance improvement showed that company’s gross claims expense for the third quarter reduced by $180 million, in comparison with the second quarter of 2019.
This improved performance has been further buttressed by, as previously reported the purchase of additional motor reinsurance.
Commenting further she noted that the amelioration strategy continues to bear fruit for the nine-month period in that the net claims expense (gross claims less reinsurance) reduced by 67% or $455 million in contrast with the similar period in 2018.
Additionally, the company’s MCT as at the end of the nine-month period is 253% above the FSC minimum regulatory requirement of 250% and a 123% improvement to that reported at December 2018.
The company’s liquidity and investment position remain robust in conjunction with our continued efficiency in handling the claims of our valued policyholders.
The 2019 loss for the third quarter is $116 million and the year-to-date nine-month is $305 million.
Improved underwriting and reinsurance strategies in conjunction with cost containment and income earned from their investment portfolio which stands at $1.2 billion as at September 30, 2019 continue to be their focus to reverse the company’s loss-making position, she remarked.
The company’s capital base remains strong and the Management Team remains committed to the company’s profitability and growth she said.