@the deal, we disagree with your computation at the highlighted line. We also notice you have just changed position from your earlier combined ratio figure of 146%

Jubilee's Team got it right on this one by saying the underwriting profits amount to KES 540M.

Refer to post #78 by the Guru.


.

No one is hating on Jubilee I have presented the figures above, comments are welcome...only fools don't change their mind!

And why should i listen to or trust a bloggers figures over acturial scientists audited financial statements?? Wouldn't that be abit too foolish??

A Fact is a fact my brother.. No amount of figures you parade here will change that!!

@ xxxxx and mwekez@ji
. Underwriting profit is And I quote investopedia "Definition of 'Adjusted Underwriting Profit'
The profit that an insurance company generates after paying out claims and expenses. Insurance companies earn revenue by underwriting new business (selling new insurance policies) and earning income on their financial investments. Subtracted from this revenue are expenses associated with running the business and any claims that are made by insurance policy holders. The remainder is the adjusted underwriting profit. This is a term specific to the insurance industry. 
Also called Underwriting Gain.
http://www.investopedia....rofit.asp#axzz20IsARdSk

Where is your inclusion of ADMINISTRATIVE EXPENSES in your calculations?????



So by the above, but this is not how to work out UNDERWRITING PROFIT/LOSS I beg to modify your thesis as follows:
Net premiums : 7,341,996,000. I agree
add commissions earned + 863,644,000. Agreed
Less net Ben n claims. -6,114,019,000. Agreed
Less comms paid. -1,580,420,000. Agreed although u added 10,000 :)
less Ops expenses. -1,804,331,000. How did you conveniently forget this integral part of the formula?
.

Leaves a net underwriting
loss of -1,293,313,000

I hope someone proves me wrong on this, with CREDIBLE arguments


If you want to work out UNDERWRITING PROFIT, expenses must be deducted.
http://en.wikipedia.org/wiki/Underwriting_profit

Please read investopedia or any other web based info on this.
I don't understand why you want to subtract operating expenses AFTER how does that work? I didn't make up the rules brother(sister)!! It's just what they are. You can refer to the various links which also say to work out COMBINED RATIO or UNDERWRITING PROFIT, EXPENSES MUST BE SUBTRACTED. But if you don't feel like subtracting the expenses and you want to modify the worldwide formula for whatever reason, please do ...or don't, entirely upto you.


Disclaimer:
I obviously, could be wrong, but opinions expressed on my posts are just my opinions.

LOL it's not Buffett that does that; and if he did, it should be made a rule just in that merit

Doesn't anyone like read books, research online, talk to people in the business and stuff? I mean, seriously, it's hard earned dosh, I can't just put it anywhere till I am 100% satusfied not "BROKER AMESEMA HII NI POA"

As I said earlier,I'm not an expert and I would love for someone to prove me wrong on this with something more than banter. Maybe the rules in Kenya are different or something, I don't know! But i am always willing to be corrected, learn and move on if it makes sense......

@the deal, @Horton, @xxxxx

We all seem to agree that:

1. Underwriting profit = Net insurance premium revenue - Net insurance benefits and claims – expenses

2. Combined ratio = (Net insurance benefits and claims + expenses) / Net insurance premium revenue


From our workings, we can conclude that composition of expenses seems to be our point of disagreement.

Actuaries, insurance accountants and other insurance professionals in the house may give us their views on how this is done in the field.

@msimon, et al, views would do this discussion a lot of good.

Otherwise, I choose to agree with Jubilee team that underwriting profits for year 2011 impressively stands at KES 540M, up from KES 476M in 2010.

I rest my case

Bottom line: Only invest in Jubilee because of their investment in Aga Khan Firms such as NMG, DTB...TPS and Aga Khan Projects such as Bujagali energy and Nation Centre...that's where all their profits come from in form of dividends, rent and capital gains...oh not to forget they have a big bond portfolio
which earns them good interest income and help manage liquidity situations...now the stock is undervalued at the NS
e...go ahead and BUY...if you make money remember me...a cold Windhoek Lager does a trick!

Advice: Study Warren Buffet's Annual letters to shareholders their the best thing you will ever come across...if you understand and master the content of those letters going to school to study investment is a waste of cash...!

So what's the conclusion/consensus then?

@ guru thanks but u need to do that yourself. The formula online for underwriting profits and combined ratios in all books and websites include EXPENSES. Why u dOnt subtract it is beyond me.

A case of blind faith in the management madam? I didn't think that would be you, trusting blindly. Remember Enron?!

Before critisizing, please give us links, quotes, something that proves us wrong with hard facts. Don't just tell me to trust the statement from the management.

The AKI writes an annual report every year. In 2010 they said Jubilee made KES 336M and not KES 476M. Perhaps one should give them a call to ask why the discrepancy. My gut feeling is that there are certain op. expenses not included in the calculation as they're incurred for activities outside of the core business. However, I'm not an expert in this field.

my 2 cents