CHL profitability delights shareholders
Guardian Business Editor
Published: May 01, 2013
Shareholders at Colina Holdings Limited (CHL) are reaping considerable benefits of late, as rising profitability has made the firm one of the highest yielding stocks on the Bahamas International Securities Exchange (BISX).
CHL, a holding company whose primary asset is Colina Insurance Limited, saw a significant improvement in its individual health insurance segment in the last financial year. A $5.49 million spike in total revenues and a $1.19 million fall in total benefits and expenses aided an impressive 119.6 percent jump in reported net earnings.
"Part of the reason was a growth in revenue. And part of that is how they price their products," said Jamaal Stubbs, senior analyst at CFAL. "The industry is recognizing that there is a disconnect. Their products were under-priced compared to rising costs."
To compensate, CHL has "repackaged" many of its products and facilitated a rise in profitably.
Going forward, the BISX-listed firm is seeking continued stabilization of its portfolio on the life and health insurance segment.
"The health business can be pretty volatile. It can make or break the earnings. You can have a couple of situations where certain claims wipe out all the profits," according to Stubbs. "I would say stability is all they can ask for. Once they do that, they can perform at current levels to the benefit of shareholders."
In addition to Colina Insurance Limited, CHL has a 30 percent interest in the Walk-in Medical Clinic and a 19 percent interest in Ansbacher (Bahamas) Limited.
Stubbs noted that CHL remains well-capitalized with a 195.1 percent minimum continuing capital & surplus ratio. That represents a rise of around 4 percent compared to the previous year. It is also noticeably higher than the minimum ratio of 120 percent imposed by international regulators.
Total assets at CHL grew just over 6 percent to $583.12 million. The firm increased its investment securities and the level of cash and demand balances.
Total policy liabilities expanded by $15.18 million, while other liabilities grew $9.74 million.
On the management side, the board of directors added Lloyd Steinke, a former executive vice president of Munich Re and a Canadian independent insurance consultant.