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Jubilee Insurance ?
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jammo
#1 Posted : Tuesday, April 07, 2009 6:32:00 AM
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Joined: 2/12/2008
Posts: 345
Gross written premiums up 33.8%

Gross earnings premiums up 38.5%

PBT up 11.3%

PAT up 7.5%

EPS Growth 3.14%....compared to 10.58 drop in 07.

wonder what it would have been if the hadn't factored in the '430% increase' in underwrittin profits!

The only reason i'd buy is store of value..small float freezes liquidity plus only 45million shares,against growing book value.. Plus It's not so far from lowest price recorded to date sh84 compared to highest price within last one year of sh205

DISCLAIMER: This is the opinion of one Jammo,CFA,CPA,Opinionated and Loud,based in nairobi. Whilst care has been taken in compiling the data to be as most factual n logical,he doesn't accept any responsibility of accuracy or completeness of info contained herein..neither does he purport to be a genius!
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across
#2 Posted : Tuesday, April 07, 2009 8:56:00 AM
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@ jammo.I agree on the store of value concept. I think if it werent for the underwritting profits,it would have been a different story. Note the huge increase in loss on investments from 45m to 508m..must be the exposure to NSE..all said and done..good stock to hold for dividends etc.
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VituVingiSana
#3 Posted : Tuesday, April 07, 2009 9:31:00 AM
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Joined: 1/3/2007
Posts: 18,095
Location: Nairobi
If they made underwriting profits,then of course it should be included. Underwriting profits means the cost of their (current) float is -ve... The future may hold losses.

Management is among the best... On insurance matters,read WB's writings. I think WB would be proud of Jubilee.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mwanahisa
#4 Posted : Tuesday, April 07, 2009 9:53:00 AM
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Joined: 6/2/2008
Posts: 1,438
Jammo,

I agree with your observation regarding Jubilee being a store of value (but not only because of liquidity or lack thereof). However,Please note Book Value (analogous to Net Asset Value) per share has actually DECLINED from Kshs 80.14 in 2007 to Kshs 63.80. The reason for this is because of a Kshs 1.15 billion drop in Fair Value reserves which are reported on the balance sheet. Note that they have reported a FV loss of Kshs 508 million on the Income statement. I guess the difference in the two figures has to do with interpretation of the relevant IFRS (re: see APA against PanAfric results).

Nonetheless,I believe Jubilee's results are actually commendable and well above my expectations given the drop in the value of financial assets in 2008 especially on the NSE. The fact that Jubilee has managed to grow their underwriting profits is testament to the fact that Jubilee is a good insurance company and not just depending on investment income. Also note that exposure to listed equities is only Kshs 3.9 billion out of a total of 20.2 billion in assets. I believe that Jubilee is reasonably well positioned to continue to deliver good (but not necessarily outsize) profits.


Opportunity calls but few respond.
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VituVingiSana
#5 Posted : Tuesday, April 07, 2009 10:05:00 AM
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And I expect Jubilee to get into the NSE in a big way in 2009. Imagine what huge gains they could have in the next 3 years if the prices return to 'fair' value. And Jubilee is growing in the regional market which are under-penetrated.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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e_kijana
#6 Posted : Tuesday, April 07, 2009 11:53:00 AM
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Joined: 1/17/2009
Posts: 55
Whats this business where you can have revenues of 7.6 Billion and Net profit of 250million (up from 50 Mil last year when Revenues were 4.5Billion). Run!! better just buy Centum now that it is low if Insurers only money they make is in investments.
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VituVingiSana
#7 Posted : Tuesday, April 07, 2009 12:17:00 PM
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Yes,insurers make money from investments. On how float works,you should read Warren Buffet's letters to the shareholders of Berkshire Hathaway.

Comparing Centum to Jubilee. I will pick Jubilee any day in terms of performance & management quality. As for BUYING shares... that depends on the price. Centum at 5/- is better than Jubilee at 200/-.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Gordon Gekko
#8 Posted : Tuesday, April 07, 2009 12:29:00 PM
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Joined: 5/27/2008
Posts: 3,760
'Store of Value.' That's quite a sore point for me,I have a lot (albeit small) that I got at Ksh 185.....
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across
#9 Posted : Tuesday, April 07, 2009 12:32:00 PM
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@Vituvingi..know anything about jubilee management?heard that the dont have a ceo?how true is this?
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VituVingiSana
#10 Posted : Tuesday, April 07, 2009 1:26:00 PM
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@GG - Well... that has happened to the best of firms. Even Berkshire Hathaway is down 50% from its highs BUT it will do very well in the next 3 years. (IMHO).

@across - I am not sure who the current CEO is but they have the ability to draw on considerable talent across the AKFED network. BTW,the Chairman does not draw a salary/emoluments!

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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e_kijana
#11 Posted : Tuesday, April 07, 2009 9:23:00 PM
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Joined: 1/17/2009
Posts: 55
I am aware of how float works and have read BH Letters. You might be informed also that float doesnt just apply to insurance companies. A bank also has float (it gets money from depositors and lends for some return) which works almost the same same way as Insurance companies - using other peoples money. I did not say Insurers do not do investments... what I meant was theat theire core business is in shambles with such a profit margin of approx 3%-4%. Now on the comparison with Centum...Centum is an investment company,just like BerkshirHathaway is and Centum also holds a substatial chunk of an insurer,in this case UAP,Besides other holdings e.g. RVR which for now is causing it a few headaches (Even Buffett's BH had the original Berkshire Harthaway textile mills which) so any investment company may at one time have some companies operating under a difficult enviroment.
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Mainat
#12 Posted : Tuesday, April 07, 2009 9:46:00 PM
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Joined: 11/21/2006
Posts: 1,590
Its always reassuring to see an insurer making money from insurance business rather than investments.One it can control,the other,its at the mercy of 'market sentiment'...
Btw,it also doesn't hurt that this is an Aga Khan firm. I believe the 3 financial ones in Kenya have some cross-shareholdings. And rarely fail.

www.mjengakenya.blogspot.com
Sehemu ndio nyumba
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VituVingiSana
#13 Posted : Wednesday, April 08, 2009 6:55:00 AM
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e-kijana... I think that making 3-4% from the CORE business is great for an insurance firm. Since you have read BH's letters,I need not explain further. As for Centum,except for the price (a low enough price) the management can't match Jubilee.

***@MainaT: Yes,the Aga Khan firms have very good performance in the longer term. All the firms generally trade at price much higher than their IPO (or Rights) prices. kirubi has 2 firms (Uchumi & Centum).

***merali firms do the opposite. They all trade at BELOW the IPO price! I am not sure of Sasini but it was @ 10/- (post split price adjustment) in the 1990s. Better to have left the money in the bank!

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#14 Posted : Wednesday, April 08, 2009 6:57:00 AM
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Joined: 1/3/2007
Posts: 18,095
Location: Nairobi
I should have added that 3-4% in a very tough year when the PEV affected lots of customers. I think Jubilee made some payouts to the victims of the PEV. Furthermore,there was a huge drop in business activity in 2008.

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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