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General Accident half-year profit up nearly 40%

Published:Wednesday | August 28, 2019 | 12:15 AM
Taxi operators on Hope Road, St Andrew.
Taxi operators on Hope Road, St Andrew.

Listed general insurance company General Accident (GENAC) is already eyeing another good year after a near 40 per cent increase in half-year profits.

“If our run rate continues as it is now or even ticks up a little, then we should have a better year than we did last year,” Managing Director Sharon Donaldson told the Financial Gleaner.

General Accident recorded after-tax profits of $135.28 million up to June, 39.8 per cent more than the $95.44 million earned for the similar period in 2018. The increased profit is outstripping last year’s performance which saw a 29 per cent increase in after-tax profits. That was the fruit of a new marketing thrust which came with a $44.5-million price tag, more than triple the previous spend.

“We’ve widened the type of coverage that we offer to the insuring public, and that has been showing up in our results,” she said.

“If you take a cursory look at the stock of motor vehicles you will notice that the PPV subsector has been showing exponential growth. In part, this is due to comprehensive deficiencies in arrangements for public transportation. PPV operators are filling that void and for us that is a growth area,” Donaldson said.

General Accident booked gross written premium of $6.56 billion, an increase of 41 per cent over the same period last year. The increase in premiums takes on more significance considering that for just half of the year GENAC is only $2 billion away from the $8.7 billion in business that the company did for all of 2018.

Historically, general insurers have shied away from the PPV subsector but Donaldson says those operators’ money is the same colour as anyone else’s.

“Our view is that not all PPV operators are bad people. We feel that they are simply trying to make a living to feed their families like everyone else. As such, we work with them to more effectively manage their risks and protect that asset that is most valuable to them,” she said.

Net claims charges grew by 23 per cent to $633 million, but Donaldson says it has not been painful to the company and that GENAC is taking it in stride.

“We don’t control the frequency of claims but rather we are seeking to educate drivers at being better on the roads. The claims don’t come from (real estate) properties. It is the motor vehicle sector, and so it is a matter of getting the insured to look after their valuable property,” Donaldson said.

The increased half-year profits boosted earnings per share. It moved from $0.09 up in June 2018 to $0.13 in June 2019.

neville.graham@gleanerjm.com