Junior company makes super profit

With extraordinary gains from investments and other income of $1.06 billion, General Accident Insurance Company Limited has reported a record $1.2 billion in profit during the financial year ended December 2011.



This was achieved as a result of gains of $847.3 million from the disposal of its shares in the manufacturing and distribution firm Seprod Limited, $154.7 million from disposal of real estate, and $61.9 million associated with the divestment of Orrett and Musson, General Accident’s insurance premium financing outfit.



Excluding those gains, the company still reported an increase in net profit, up 80.99 per cent to $220.9 million from $122.05 million, the company said in a filing to the Jamaica Stock Exchange (JSE) at the end of March.



General Accident is the only general insurance company now trading on the junior market.



"Our team of 77 professionals delivered strong operating results in 2011,” said Paul Scott, chairman of General Accident.



“In fact, this year's premiums, underwriting profit and net profit were the highest in our history," he added.



During the period under review, the company grew net premiums by 18 per cent to $819 million from $693 million in 2010.



Underwriting profit grew to $161.4 million, representing a 134 per cent increase over the $68.8 million achieved the previous year.



On the expenses side, General Accident reported a marginal decline in the cost of claims, while management and commission expenses increased. Other operating expenses also reflected a decline.



General Accident, which is celebrating 30 years in existence and is in its

first year as a publicly listed company, is a subsidiary of the Musson Group, a diversified conglomerate with interests in a range of activities including financial services.



The company last traded at $2.15 on the junior market of the JSE, with its more than one billion ordinary shares valued at $2.1 billion.



On balance sheet, General Accident has an asset base of $3.5 billion, which company executives believe will allow them to take advantage of opportunities in the marketplace, particularly in the commercial and homeowners lines of business.



General Accident provides property casualty and general insurance products, related claims and other services to both individual and commercial customers.



It sells about 17 insurance products including coverage for motor, house and/or content, computer, marine cargo and loss of money.



Going forward the company expects to continue generating good returns for shareholders over the long term.



"While our results will vary in the short-term according to market conditions and risk events, I continue to expect that we will generate superior returns to shareholders over the long-term," said Scott.



sabrina.gordon@gleanerjm.com