IronRock profits shaved
Business Reporter
DESPITE RAKING in record premiums for the financial year ended December 2022, Junior Market-listed insurance company IronRock only managed less than a half of the profit earned in 2021.
Gross premiums written (GPW) was just over $1.1 billion; $223 million or 25.31 per cent more than the nearly $881 million for 2021. After ceding reinsurance to the tune of nearly $936 million, in addition to other costs, net premiums earned stood at just over $170 million. This was $20 million, or about 10 per cent less than the $190 million for 2021.
Net profit for the year was $ 28.15 million. This was less than a half of the $53.7 million for 2021. The profit was made possible by the company’s usual strong fourth-quarter performance. Fourth quarter earnings stood at $64.57 million. In addition, the company earned $13.46 million, a reversal of the $17.53 million second-quarter loss, and an $8.55 million first quarter loss.
In its just-released audited results, IronRock said the movement in profits was a result of actuarial and income tax adjustments. The $936 million ceded to reinsurers was $249 million more than the $687 million ceded in 2021.
“The actuarial adjustment has arisen due to an increase in the provision for claims incurred but not reported (IBNR), and unallocated loss adjustment expenses. These provisions are actuarially calculated and consider variables such as historical claim development, inflation and exchange rate movement,” the company reported, noting that the provisions are unusually high for 2022 and influenced by the high inflation rate.
After peaking at 11.8 per cent in March 2022, inflation moderated for most of the year, ending at 7.8 per cent in December.
Despite the bigger payouts, IronRock ended the year in a healthier cash position. Cash and cash equivalents at the end of the year stood at $142.4 million, double the $69.64 million for 2021.
IronRock’s shares were listed on the Junior Market of the Jamaica Stock Exchange in March 2016. This allows the company a remission of taxes for 10 years, with years one to five being 100 per cent, while, in years five to 10, taxes are paid at 50 per cent. The company is therefore in its second year of paying 50 per cent of taxes due.
IronRock Insurance Company was formed in 2015 by founders Evan Thwaites, the Hon William McConnell and Wayne Hardie, with leveraging information technology to cater to its client?le. The company seems to have found a sweet spot as the go-to for cargo, boat and renter’s insurance.
Since 2021, IronRock has been making a showing in the competitive motor insurance race, specialising in private car insurance.