Iron Rock came to the general insurance market just about when premium rates for catastrophe coverage is under pressure with consumers enjoying some of the lowest rates in years and with one element of good revenue losing it sting.
Iron Rock ended 2016, their first full year of operations, with a loss of $50 million, before fair value gains on investments of $5.5 million, taking the net position to a loss of $45 million, up from the forecast in the prospectus of $30 million as the company underperformed on most fronts, compared to forecast. Gross premiums written projected at $170 million ended well down, with $127 million generated in the year. Profit before operating expenses came in at $9 million versus $20 million forecasted. Investment income ended at $17 million versus $39 million while foreign exchange gains ended at $15 million with forecast being $7 million. Operating expenses ended at $91 million, lower than the $96 million projected. Underwriting loss before other income ended at $82 million versus $76 million after a lower loss claim of $6 million than the $12 million projected.
William Mc Connel one of teh directors of Iron Rock
On the plus side, the big expansion on the way in the hotel and BPO sectors and other areas will provide an expanded market going forward and thus provide a base that they can expand their income from.
In spite of the loss, the company ended with a capital base of $560 million and holds investments of $366 million with $85 million in quoted equities. There is also an additional $70 million in short term investments. With growth in local equities the company should enjoy above average returns from this area that will boost the overall investment performance that could push them into an overall profit in 2017, but they are unlikely to see the same levels of foreign exchange gains enjoyed in 2016. Overall investment income realized or accrued could end up around $50 million in 2017 and would be well ahead of forecast.
