Key turns to travel market for more business in Olympics year
Published:Friday | June 28, 2024 | 12:12 AMSteven Jackson - Senior Business Reporter
Key Insurance Company Limited wants to grow its travel insurance business to offset rising costs related to its core motor segment.
The company launched a travel insurance portal on its website this year, ahead of the summer Olympic Games being staged in France from July to August.
“We are encouraging everybody going to France for the Olympics to buy travel insurance,” said Key General Manager Tammara Glaves-Hucey at the company’s annual general meeting on Wednesday.
It’s not known how many Jamaicans will travel to the Olympics, which is expected to attract around 15 million to 19 million global visitors to France during the games.
Key currently earns two-thirds of its income from motor insurance. Glaves-Hucey said the general insurer’s main clients are persons in the middle to low-income brackets seeking third-party coverage for their first car. She cited BCIC as its main competitor.
On its portal, Key offers traveller coverage up to US$2,000 for lost luggage, US$1,500 for trip cancellations, up to US$150,000 for medical coverage, US$50,000 in the case of accidental death, and more. It costs roughly $14,000 in Jamaican currency for a 40-year-old to secure travel coverage for Europe, which increases to $20,000 with a child. This initiative marks the diversification of Key’s insurance portfolio.
Key Insurance made a profit of $9.9 million for the March 2024 quarter on $700 million in revenue, up from $3.5 million on $585 million in revenue the previous year. However, in its core area of business, insurance services, the company made a loss of $8.3 million in the quarter. However, that outturn was an improvement on the $20 million of losses on insurance services booked in the March 2023 quarter.
The losses were offset by investment income of $52 million in the March 2024 quarter and $44 million in the prior year.
“We are focused on growing our revenue across all lines of business,” said Glaves-Hucey. “Our motor insurance remains a priority for us,” she added.
Glaves-Hucey acknowledged the challenges related to global inflation, reduced consumer purchasing power, and higher reinsurance costs, which have increased by about 15 per cent. Additionally, car crashes continue to rise, with over half of Key’s motor insurers filing claims. With Key’s primary target market comprising first-time car owners, its clients typically have limited insurance track records. This demographic has contributed to the volume of claims and associated costs.
“We are improving our underwriting capabilities. We are spending a lot of time with team members to ensure we are making the right underwriting decisions,” Glaves-Hucey said. “We cannot control everything, but it will enhance the overall experience not just for customers, but for team members.”
So far, 195 people have been killed in crashes this year. On average, 5,500 car collisions occur annually, resulting in over 13,000 people seeking treatment at hospitals, according to the annual Economic and Social Survey Jamaica report published by the Planning Institute of Jamaica. Car collisions represent the single largest category of visits to hospital emergency rooms, highlighting the severity of the issue.
“The life you save might be your own,” said Glaves-Hucey, echoing a tagline from a motor safety campaign, in encouragement of safer driving.
Additionally, Key Insurance hopes no storms hit Jamaica despite forecasts of an active hurricane season. “Preliminary reports say it should be an active hurricane season. We have you covered for the season,” she said.
She spoke on Wednesday when a layer of Saharan dust travelled across Jamaica, accompanied by high winds and later rain.
“I am not sure what is happening outside,” Glaves-Hucey said, alluding to the unusual weather. “But we are ready to serve all our customers, whatever comes our way. We are praying for the best,” she told the company’s shareholders.
Key Insurance is majority owned by the GraceKennedy conglomerate and is a member of the GK Financial Group.