CINICO in profit despite government debts

(CNS): Even though it was owed well over $8 million by its main shareholder, the CI government, CINICO still managed to make a profit in the last financial year of over $3.5 million, according to its 2009/10 annual report. It is the second year that the government owned insurance company, which provides affordable insurance for those who are unable to gain health cover in the regular insurance market place, as well as for civil servants, pensioners and veterans, made a profit. The report, which was tabled in the Legislative Assembly last month and is now a public document, reveals, however, that next year CINICO is not expecting the profits to continue because of growing claims losses and a cut in the premium rates paid by government.

According to the financial statement, the Ministry of Health paid $3.1 million of the $8.2 million it owes in August 2010, several months after the close of the financial year. Had government paid this CINICO would have exceeded its $5.8 million profit in 2009/08.

Auditor General Alastair Swarbrick said in his audit that $4.3 million of the $8.2 million relates to the 2008/2009 fiscal year and to settle it government would need to approve a supplementary budget in the Legislative Assembly.

During the financial year CINICO paid out almost $44 million in claims, over $4 million more than its pay outs in the 2008/09 financial year. 784 cases were referred overseas, which had increased from the previous year’s figure of 729. Of those overseas health case referrals most were for cardiovascular problems. The report also reveals that 33% of all claims made are for overseas treatment. The government company also stated that its net worth, as of 30 June 2010, was $12.5 million, up from just $190,000 two years earlier.

In the management statement CINICO said it expected a loss in the current 2010/2011 financial year as a result of growing local and overseas claims losses, as well as the lower premium rates being paid by the government.

“To compensate for the reduction in premium, the company will be intensifying its focus on claim losses and other expenses,” officials stated. The introduction of the proposed health facility by the Dr Devi Shetty hospital may decrease the number of overseas referrals in future but officials said it would not have an impact on CINICO for some time as the facility was planned over a 10-year period.

CINICO is one of only a handful of government companies that have managed to produce their annual report for the 2010 financial year end of 30 June almost within the 31 December 2010 deadline.