Property insurance rates continue to increase

Durrant Pate/Contributor

Jamaica-based general insurer Iron Rock recorded strong growth in Gross Written Premium (GWP) during the September quarter, which continues to benefit from increased commercial activity and growth in the local economy.

GWP for the quarter increased by 27 per cent to J$265 million compared to J$209 million in 2021.

Proportional reinsurance ceded increased to 78 per cent of GWP. However, excess of loss reinsurance costs fell by approximately eight per cent to $12 million.

Commissions increased by over 70 per cent to J$9 million, while claims declined by 37 per cent to J$17.5 million. Property insurance rates continue to increase and from all indications these increases will continue into the new year. Iron Rock, which was incorporated in Jamaica on June 9, 2015, has benefited from this trend with growth in its GWP for property topping 33 per cent on a year-to-date basis.

Motor losses continue to increase

At the same time, motor losses continue to increase, contributing significantly to Iron Rock’s underwriting losses. Underwriting loss fell to J$17 million, down from J$28 million in 2021. Other income increased by 40 per cent to J$30.7 million versus J$21.8 million in 2021, led by gains on the sale of investments of J$5.4 million and investment income, which increased by 25 per cent to J$14 million.

Locally, interest rates continue to rise and as a result, Iron Rock’s management revised the company’s investment strategy to take advantage of the prevailing conditions. Iron Rock, which is a subsidiary of Granite Group Limited, which is incorporated and domiciled in St Lucia, saw its operating expenses run flat at J$54 million.

The general insurer ended the quarter with profit of J$13 million compared to a loss of J$6 million in 2021.

Year-to-date performance

For the combined three quarters GWP increased by over 20 per cent and now totals J$760 million, an increase of 20 per cent over the prior year. Net commissions totalled J$28 million, an increase of 115 per cent when compared to the corresponding period in 2021.

Operating expenses increased by nine per cent and now amount to J$159 million. Net claims are down J$10 million to J$60 million but this reduction was offset by a reduction of J$19 million in earned premium. As a result, underwriting loss increased to J$67 million.

Other income increased by J$4 million to J$54 million with investment income J$39 million and investment gains of J$8.6 million being the largest contributors. Consequently, for the nine months ended September 30, 2022, saw Iron Rock generating a net loss of J$12.6 million.

Total Assets grew by 20 per cent and amount to J$1.7 billion, while Shareholders’ Equity increased by J$50 million to J$608 million, an increase of six per cent both, when compared to the corresponding period in 2021.