CINICO’s profit: $3.5 million

The government’s insurance company CINICO posted a profit for the second consecutive year last year, despite being owed almost $8.2 million in outstanding premiums and fees from the government.

According to the 2009/2010 annual report, tabled at the Legislative Assembly last week, the company reported a profit of $3.5 million, as of 30 June, 2010. In the financial year, 2008/2009, CINICO reported a $5.8 million profit and had annual losses every year prior to that since its creation in December 2003.

“The profitable position was made possible by favourable underwriting developments from the prior year, in addition to low administration expenditure levels,” a management statement from the company read.

According to the financial statement, as of June 2010, the government owed CINICO almost $8.2 million for outstanding premiums, administrative services only claims and fees receivable.

Auditor General Alastair Swarbrick, in his report on the insurance company’s finances, pointed out that $4.3 million of the $8.2 million for outstanding premiums, administrative services only claims and fees receivable related to the 2008/2009 fiscal year, the settlement of which would require the approval of a supplementary budget by the Legislative Assembly.

Loss expected

CINICO officials said they expected a loss in the current 2010/2011 financial year, due to growing local and overseas claims losses and a lowering of its premium rates to its largest policy holder – the government.

“To compensate for the reduction in premium, the company will be intensifying its focus on claim losses and other expenses,” a joint statement from CINICO’s general manager Carole Appleyard and chief financial officer Frank Gallippi.

Among the losses it faces is an expected 10 per cent increase in its overseas claims losses.

They said the introduction of the proposed Shetty hospital would decrease the number of overseas referrals, but would not have an impact on CINICO for some time because the facility would be built over a 10-year period. The insurance company further suggested that proposed changes to the insurance law, the pilot CayHealth programme, a proposed new verification and billing system at the George Town hospital

The company stated that its net worth as of 30 June, 2010, was $12.5 million, up from just $190,000 two years earlier.

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3 COMMENTS

  1. CINICO is a much need health insurance plan and should really be run on a non-profit basis. There are many on the island who cannot afford health coverage. If their rates were lower, perhaps they could. Expats are covered by their employer by law — its the locals who hurt by CINICOs expensive premiums. Boasting a profit is nothing to be proud of. How about offering free health clinics with your profit? That would be the right thing to do.

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  2. Expats are covered by their employer by law — its the locals who hurt by CINICOs expensive premiums.

    My husbands health insurance is offered by his employer, but not covered by them. He has to pay the hefty monthly premium for our coverage just like everyone else. Same with the company that I am working at – we offer the insurance but the employee still has to pay their portion of the coverage.

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  3. For the love of god. Would you rather Cinico be running a deficit, and have to close its doors, and NO ONE gets coverage! A modest profit is one thing. Its entirely another thing, if its too much profit, and people suffer IE (CUC and its 20 Million plus profit AFTER expenses, from an island that only holds less than 50K people!) Thats disgusting.

    For mermaid. Business arent around long if they give stuff away free. Then you would complain that there is nothing for anyone.

    Nothing is for free. You pay one way or another.

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