General Accident Audited Net Profit Falls Significantly Due to Higher Claims and Management Expenses

  • For its audited financial year ending December 2020, General Accident Insurance company reported net profit attributable to shareholders of $242.50Mn (EPS: $0.24), a 56.6% contraction over the same period in 2019. 
  • Although net premium earned grew by 22.7% (or $506.79Mn) this was largely eroded by a 50.7% (or $611.60Mn) increase in claims expenses and 23.8% (or $235.78Mn) rise in management expenses, which together contributed to the YoY contraction in the company’s bottom-line. Costs incurred in relation to the commencement of operations in Barbados also added to the overall increase in expenses. 
  • Management expects the company’s profitability to improve in 2021 due primarily to premium growth in Barbados and Trinidad. In addition, as the reorganization of its foreign subsidiaries is now fully complete, it anticipates that overhead costs will stabilize. Furthermore, as the group continues to grow in size, it expects to achieve scale and resilience. 
  • Since the start of the year, General Accident’s stock price has declined by 7.1% to $5.75 on June 09, 2021. At this price, the company trades at a P/E of 30.3x earnings, which is above the junior market financial sector average of 31.8x earnings.

(Source: Company Financials)