Key Insurance and Caribbean Assurance Brokers Report Improved Six Months Net Profit

  • Local insurers, Key Insurance Limited (KEY) and Caribbean Assurance Brokers Limited (CABROKERS), reported improvements in their bottom line for the six months ended June 2022. KEY reported a net profit of J$12.25Mn (EPS$0.02), a 576.3% year-over-year improvement, while CABROKERS recorded a net profit of J$4.45Mn (EPS $0.02) versus a loss of J$21.32Mn in 2021.
  • Both KEY (20.6%) and CABROKERS (17.9%) saw double-digit increases in revenues as business activity increased. KEY’s improved performance was attributable to improvement in both the insurance and investment segments of the business, while CABROKERS saw improved commission income from all four areas (International, Individual Life and General and Employee Benefits).
  • Administrative and other expenses for KEY increased by 20.3% while CABRROKERS operating expenses increased by a marginal 1.2%. KEY also saw a 25.4% uptick in claims expenses for the review period.
  • Both companies will have to navigate the headwinds impacting the global and local economy to ensure that shareholders’ value is protected. We expect KEY will continue to reposition its investment portfolio to optimize yields and drive interest income considering the rising interest rate environment. There will also be sustained efforts to improve underwriting practices to drive lower underwriting losses in the coming quarters and better value for shareholders.
  • CABROKERS is targetting customer retention and business development strategies to enhance future profitability. This includes a focus on improved customer satisfaction through digital transformation and the creation of faster, more personalized service to drive revenues.
  • KEY’s stock price has decreased by 4.6% since the start of 2022, while CABROKERS’ has increased by 10.8% to close Friday’s trading session at $3.84 and $2.52, respectively. KEY currently trades above the Main Market Financial Sector Average of 10.3x at a P/E of 12.0x. On the other hand, CABROKERS currently trades below the Junior Market Financial Sector Average of 13.6x at a P/E of 8.1x.

(Sources: JSE & NCBCM Research)