Key Insurance Records Slight Improvement in YTD Bottom-line, despite a Q2 Fall-off  

• Key Insurance Company Limited (KEY) recorded a net profit of $9.38Mn for the quarter that ended June 30, 2023, marking a 5.8% decline in profitability. On the other hand, net profit for the six months ended June 30, 2023, was up 5.4% to $12.91Mn.
• In Q2 2023, KEY witnessed a 24.4% increase in insurance revenue compared to the corresponding period in 2022. Additionally, H1 2023 revenue increased by 22.7% to $238.82Mn. The non-motor segment showed significant strength, outpacing the prior year’s six months by 48.4%. Consequently, its share of revenue grew from 30.0% in 2022 to 36.3%.  Meanwhile, the motor segment, KEY’s backbone, grew by 11.7% over the six months ended 30 June 2022, accounting for 63.7% of insurance revenues.
• Insurance service expenses increased by 11.6% in the quarter ended 30 June 2023 and 13.0% in the six months ended 30 June 2023. The noted increase was largely attributable to the escalation in reinsurance costs as well as increased claims costs in certain segments. Notwithstanding these elevated costs, KEY reported an increased Profit Before Tax (PBT) of 9.5% in the six months ended 30 June 2023 relative to the corresponding period in 2022. The Company remains optimistic and is focused on driving profitable growth in the upcoming quarters.
• KEY’s stock price has decreased by 10.3% since the start of the calendar year. The stock closed Thursday’s trading session at $2.96 and currently trades at a P/E of 29.3x which is above the Main Market Financial Sector Average of 11.8x.
• Going forward, the company anticipates the increases in property rates to continue contributing positively to future results. Targeted measures are being deployed to improve claims results, and these actions are expected to positively impact performance as the year progresses.

(Source: JSE)