Despite difficult operating conditions, 2011 proved to be a successful year for Consumers’ Guarantee Insurance (CGI).
According to recently released financial statements, the company posted a pre-tax profit of $2.1 million with an after-tax profit of $1.7 million for the year ended December 31, 2011.
By comparison, in 2010 the company incurred a $2.3 million loss before taxes and a $1.8 million loss after taxes. Gross insurance premiums written grew four per cent to $54.3 million.
Net underwriting income also improved significantly, from $4.4 million in 2010 to $8.4 million in 2011, a 92 per cent improvement.
Meanwhile, commissions earned rose from $6.9 million to $10.2 million.
“During 2010 we increased net claims reserves by approximately $4 million to provide for losses incurred in previous years and this had a knock-on impact on our commissions earned for that year,” chairman Bruce Bayley explained, noting that these adjustments account almost solely for the disparity in results year-on-year.
Bayley noted that investment income remained flat during the year, reflecting depressed interest rates in the market.
“Operating costs were reduced by 5.5 per cent, or $426 000, during the year as we effected certain changes during the year and these savings went directly to the bottom line,” he said.
The chairman added that the company maintains statutory funds as required under the insurance act and the current level of assets lodged exceeds fund requirements.
“Looking forward to 2012, while we do not anticipate improvement in the economy, based on our 2011 results we are forecasting three to five per cent growth in our premium portfolio.
“We also anticipate that operating results will be in line with 2011,” Bayley said. (NB)
