Canadian Underwriter

Goran posts almost $30 million loss for 2002

June 16, 2003   by Canadian Underwriter

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Toronto-based specialty insurer Goran Capital Inc. (OTCBB: GNCNF; TSX: GNC) for 2002 reported a net loss $29.7 million, or $5.51 per share, a slight improvement over the loss of $34.1 million, or $5.99 per share, reported in 2001. It is also a marked improvement over the $63.2 million loss recorded in 2000, before the company sold its crop insurance business. Pretax loss was $21.7 million, or $4.02 per share, in 2002, against $21.6 million, or $3.79 per share, in 2001.
The continued losing streak had the company noting in its annual report, “there can be no assurance that the company can continue in business if these operating losses continue”.
This is especially true given the regulatory scrutiny the company now faces from U.S. regulators in several provinces as a result of its declining results.
Gross premiums written were down to $111.4 million (2001: $193.2 million) and net earned premiums fell to $41.0 million (2001: $108.2 million). Investment income was dropped to $4.4 million from $7.0 million the year prior.
The company’s combined ratio soared to 162.3% last year from 125.7% the year prior. Its loss and lass adjustment expense ratio was a staggerign 125.5% in 2002 (2001: 88%).
As of the end of December 2002, book deficit per share stood at $16.82, and market value per share had eroded to $0.22. Total shareholders’ deficit is $90.1 million.
Goran writes non-standard auto in the U.S. through Pafco and Superior, and finite reinsurance through Granite.

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