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MANAGING DIRECTOR’S Statement
Introduction
The economic challenges impacting the reinsurance and insurance sectors continued during 2018, despite the numerous worldwide catastrophes and the extraordinary number of claims reported in 2017 from Hurricanes Irma, Maria and Harvey. With an estimated cost of $140 billion, the losses from these events were expected to change the market cycle of the industry. However, reinsurers maintained their capacity levels, resulting in no noticeable changes in the market fundamentals. Consequently, pressure on the existing business models of reinsurers and insurers will continue, due to years of inadequate pricing and low investment yields.
Insurers that did not change their risk appetite and renewed their portfolio of business in the Caribbean had marginal success in increasing rates, mainly in the territories which were damaged by the 2017 hurricanes.
2018 Financial Performance
The 2018 consolidated results for the RoyalStar Group were both ahead of prior year and budget. The Group produced a positive financial performance reporting a net income of $5,230,100 which comprised of an underwriting profit of $3,203,600 and an investment income of $2,026,500. This represented an increase of $622,700 over the prior year results. Our total equity as at 31 December 2018 was $49,325,900, an increase of $2,135,100. The ROE was an acceptable 12.04% compared to 11.29% for 2017. The Group’s assets totaling $136,753,900 included $48,772,400 in cash and other investments. It should also
be noted that gross claims reserves decreased by $166,044,900 as a result of the Group settling the majority of claims notified from the various hurricanes in 2017.
Gross Written Premium (GWP) in the amount of $67,151,100 declined by 3.48% compared to prior year. This decline was due to the loss of global business from our network partners. Net Written Premium (NWP) after deduction of excess of loss reinsurance costs was flat at $15,876,800 compared to prior year. Administrative expenses of $5,888,100 were in line with year-end projections. We are pleased to confirm that our insurance rating of ‘A’ Excellent has been confirmed by A.M. Best during 2018.
Responsive
With changing customer expectations and their need for timely and continuous communication, RSA must leverage modern technology to improve customer satisfaction. We must continue to monitor trends and be “Responsive” in reacting quickly and positively to our customers, offering them more efficient service and innovative products for their business and personal insurance needs.
Our clients currently have the ability to report claims, at their convenience through our website 24/7. We are also looking forward to the upcoming release of our claims app. This tool will allow customers to report claims using their mobile device in real-time via video sessions, therefore digitally transforming the claims process from first notification of loss to settlement.
Future
During 2018 Peter Muscroft, Vice President, Technical Operations, retired after thirty-seven years of service in the local insurance industry. Peter was unselfish and shared his technical knowledge with all industry colleagues. Based on the Group’s succession policy, Reginald Munroe, a very talented young insurance professional, was promoted to the role of Executive Manager, Technical Operations.
The results for 2018 continue to validate that our core business model of disciplined underwriting, fair claims settlement, focused customer service and quality reinsurance protection is still an effective business strategy for the Group.
We will continue to embrace profitable opportunities as they are presented, especially those which further diversify the profit stream of the Group.
Conclusion
We would like to thank our Shareholders and Directors for the support given to Management and Staff. We are committed to listening and responding to the needs of our customers, to ensure that we remain the company of choice for all their future insurance solutions.
Anton A. Saunders Managing Director
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