EV, European auto targeted as Key prospects
Published:Friday | June 30, 2023 | 1:39 AM
To access this article in full please login or register today
Electric vehicle and duty-free European imports are being eyed by Key Insurance Company Limited as growth segments in the motor insurance market. Key Chairman Don Wehby said at the company’s annual general meeting on Wednesday that he expected the...
Electric vehicle and duty-free European imports are being eyed by Key Insurance Company Limited as growth segments in the motor insurance market.
Key Chairman Don Wehby said at the company’s annual general meeting on Wednesday that he expected the EV market to grow quickly, offering opportunity for Key to write more policies; while General Manager Tammara Glaves-Hucey said Key had similar expectations for European auto imports, following the full elimination of duties on auto imports emanating from the European Union this year, as part of a trade agreement.
With those expectations, Key is projecting an increase in motor premium revenue, a segment that last year brought in 72 per cent of the $2.55 billion in revenue booked by the insurance company that’s owned by the GraceKennedy Group. Some of the growth is also expected to come from the increase in motor premium rates in May.
Notwithstanding the hike in premiums, Glaves-Hucey said the company “remains competitive” in the market.
Key Insurance offers coverage for automobiles, property damage, workers’ compensation, homeowner’s insurance, travel, and solar systems.
Glaves-Hucey identified property and solar as two of the growing segments. The business written for solar year-to-date already matches the business done for all of 2022, she said.
This year, Key expects to make progress on its digital services, a project that was delayed because of the loss of a critical employee, the GM said.
“We are looking at technological solutions to help with delivery of products. One of the things we are looking at is the ability to choose and pay for both homeowners’ coverage and motor online before the end of 2023,” she said at the meeting.
GraceKennedy acquired Key Insurance between 2019 and 2020, a takeover that bailed out the struggling company, which was consumed by its losses and in breach of its regulatory limits.
To turn around the company, GraceKennedy pursued a rights issue to buffer Key’s capital, and restructured its reinsurance arrangements.
Last year, Key Insurance achieved an MCT ratio of 234.4 per cent, well above the capital adequacy ratio that the Financial Services Commission says is now set at 150 per cent.
Last year as well, the company made $54 million in profit. And the year before that, $160 million, but the latter outturn was due to a one-off $208-million actuarial adjustment due to material improvements in the company’s motor loss ratio and also its restructured reinsurance arrangement.
On a normalised basis, Key’s earnings last year were estimated at $43 million, up 148 per cent, the company said.
Claims expenses rose 67 per cent, but only 24 per cent on a normalised basis, said Chief Financial Officer Stewart Andrade.
Key is one of several insurance businesses owned by the GraceKennedy Group, the others being Allied Insurance Brokers, joint-venture Canopy Insurance, GK Insurance, GK Insurance Eastern Caribbean and GK Insurance Brokers Limited.
Key’s assets were estimated at $5.09 billion last year in a general insurance market of eleven companies, with $114 billion in total assets.