Wed | Jun 19, 2024

Canopy Insurance makes its first yearly profit

Published:Wednesday | May 22, 2024 | 12:07 AMSteven Jackson/Senior Business Reporter
GraceKennedy Group  CEO Don Wehby.
GraceKennedy Group CEO Don Wehby.

Canopy Insurance Limited made a yearly profit for the first time since it started operations, its newly released financial results show.

The health and life insurance company made $39 million profit at year ending December 2023, spinning from a loss of $189 million in the prior year. The company, a joint venture between conglomerates GraceKennedy Limited and Musson Group, started booking revenue in 2018. It is competing in a market led by Sagicor Life Jamaica Limited and Guardian Life Limited, respectively.

Canopy’s revenue rose to $3.15 billion, reflecting gains of 15 per cent.

At start-up, Canopy began with a captive market within Musson’s and GraceKennedy’s group operations, alongside other clients. Revenue has grown consistently for the new company, over the years, moving from $93 million over the 2018 and 2019 early start-up period, to $1.4 billion in 2020, $2.2 billion in 2021, $2.7 billion in 2022 and to a new milestone above $3 billion in 2023.

Still, 2023 was the first time the growth in revenue was big enough for Canopy to cover its insurance expenses, resulting in Canopy’s first operating profit. It allowed the company to cover staff and finance costs using the profit from operations.

As for the insurance company’s future outlook, GraceKennedy CEO Don Wehby has promised to respond.

Wehby’s outlook on the business last year was spot on. At that time he told the Financial Gleaner that Canopy would have turned a profit in 2023, which the audited figures have now confirmed.

However, Canopy still has $580 million in accumulated deficits, from its years of losses, weighing down its balance sheet.

As large employers, GraceKennedy and Musson wanted greater value for their monthly spend on group health and life insurance premiums. So, they decided to form a competing entity, which is now one of six players making up the life market, the others being Sagicor Life, Guardian Life, Scotia Jamaica Life, JN Life and Cuna Caribbean Insurance.

In the early days, the company told the Financial Gleaner that it had secured a client base of 10,000 individuals, 6,000 of whom were staff at GraceKennedy and Musson. Last year, Wehby said the proportions had shifted with most of the client base comprised on persons outside of the two conglomerates.

Canopy is now led by CEO Oliver Tomlinson, formerly of JN Life. He took over the leadership role in 2022, replacing Sean Scott, who rejoined beverage maker and consumer products distributor Wisynco Group in a senior position as its deputy CEO.

Canopy Insurance remains a small player in the life market, industry data from insurance regulator, the Financial Services Commission, shows.

The FSC’s compilation put industry revenue at $105 billion in 2022, to which Canopy would have contributed less than $3 billion.

Still Canopy showed resilience that year, having grown its top-line income at a time when the overall market had declined by five per cent, from $111 billion to $105 billion.

Across the industry, earnings before tax rose by 6.1 per cent to $30.2 billion in 2022. Data for 2023 is expected to be released soon.