Strong improvement in Euroins Q4 net premiums; 2016 ends with BGN 1m profit vs. BGN 6m net loss in 2015 (POSITIVE)

Euroins gross premiums in Q4 2016 were up 19% YoY to BGN 34.6m. The breakdown by type of insurance reveals that the increase came from “other general insurance premiums”. A significant – 44% YoY – decline in ceded reinsurance premiums and a BGN 1.8m increase in the unearned premium reserve in Q4 ’16 compared to BGN 9.5m decrease in Q4 ’15 resulted in 7.7x higher net earned premiums in the last quarter of 2016. In the same time the net claims surged 7x YoY in Oct-Dec 2016, bringing the net claims ratio down to 59% from 63% in the year-ago period. All cost items surged significantly in Q4 – acquisition costs were up 5x to BGN 17.7m, while administrative expenses were 6x higher YoY (up to BGN 5.3m). The final technical account result was BGN 0.7m loss in Q4 ’16 vs. BGN 7.6m loss in Q4 ’15. With the support of the net investment income Euroins reported BGN 319k net profit in Q4 2016 vs. BGN 7.4m loss in Q4 2015. Total 2016 gross premiums reached BGN 117m, down 1.1% YoY, while 21% less ceded reinsurance premiums and BGN 5.2m increase in the unearned premium reserve (BGN 12.7m decrease in 2015) brought the net earned premiums to BGN 104m in 2016, up 22% YoY. Net claims last year were up 24.4% YoY to BGN 60.6m, opex increased 22% to BGN 41.3m over surging acquisition costs. The result on the technical account improved to BGN 11k loss from BGN 7m loss in 2015. 2016 bottomline came to BGN 1m profit from BGN 6.4m loss in 2015.