GamaLife exits loss to €35.7m
Insurance company GamaLife, formerly GNB Vida, has achieved a profit of €35.7 million for the first half of 2021.
It compares to a loss of €50.3 million registered for the same period in 2020.
“We are pleased to announce that GamaLife has today a commercially and financially solid position. Our partnership with Novo Banco is working well and our staff are making a tremendous effort to support our customers in these uncertain times, thereby strengthening our operation and making GamaLife an agile and independent company”, says Matteo Castelvetri, CEO of GamaLife, quoted in a communiqué on Thursday.
“Some one-off factors contributed towards this result. In particular provisions set aside for the Liability Adequacy Test (LAT) which achieved a positive amount of €20 million between January and June, 2021 which compared to a negative amount of €37 million in the first half of 2020.”
The purpose of LAT is to verify the adequacy of provisioning for life insurance. The test consists of comparing the amount of provisions with the best estimate of provisions, arrived at on the basis of the present value of the best estimate of the future expected contractual and other cash flows.
GamaLife says that these provisions “depend on the evolution of interest rates on Portuguese State bonds which it invests in, but which can create volatility in the company’s accounts. Despite not being so important to the operation, it has had an “important accounting impact on GamaLife’s cashflow and solvency”.
According to the company, accumulated production rose to €269 million in H1 which was an 88% increase on the like-for-like period last year. The growth was explained by the successful growth in sales of products linked to investment funds.
Regarding insurance linked to investment funds, GamaLife tripled its market share from 3.8% to 11.4%.
GNB Vida, now called GamaLife, was sold in October 2019 by Novo Banco to funds managed by Apax Partners.