JIIC motor review eliminates GK insurance profit
Published:Wednesday | November 20, 2013 | 12:00 AM
GraceKennedy's general insurance portfolio is unlikely to see a recurrence of one-off events linked to the motor business of a Jamaican subsidiary, which led to a near J$25 million loss, says Group CEO Don Wehby.
Revenue is up three per cent in the conglomerate's insurance segment, which covers assets in Jamaica and the region, but profits have fallen 108 per cent year-to-date September.
"A comprehensive review was done for Jamaica International Insurance Company (JIIC) focusing on the claims reserves for the motor portfolio. An adjustment was done, resulting in the J$24 million loss," said Wehby.
"The exercise is now complete and we do not anticipate any considerable changes going forward," he said.
The conglomerate's insurance businesses include JIIC and Allied Insurance Brokers, Jamaica; First Global Insurance Brokers, Turks & Caicos; EC Global Insurance Company Limited, St Lucia; and Trident Insurance Company in Barbados.
Andrew Levy, the regional director for insurance services for GraceKennedy Financial Group, says general insurance under-writing has been buffeted by the falling Jamaican dollar, the rate of accidents and motor insurance fraud, as well as a rise in legal claims.
Group insurance revenue rose just by around three per cent to $3.95 billion, but the segment made a pre-tax loss of $24.92 million compared to pre-tax profit of $319 million in the previous nine-month period.
"General insurance broking is always challenging due to the intensity of competition," said Levy. "However, we expect to have a good year," he said, suggesting that the fourth-quarter performance would be more positive.
Citing 2012 industry data, Levy said the GraceKennedy group controls 14 per cent of the underwriting market for second place but has the leading market share of almost 20 per cent of the broking market in Jamaica.
The group currently has no plans to enter the life market, he said.
"We are working very hard on a couple of opportunities and we expect these efforts to come to fruition in 2014, however, any further comment would be premature," Levy told Wednesday Business.
"Additionally, the initiatives for the growth of the existing businesses will have a positive effect on adding new premium to the group and providing our level of customer service to more customers," he said
Wehby also said the coming year held good prospects for the insurance segment arising from new products being rolled out to the market.
On October 8, JIIC launched two microinsurance products: GK-AMed, a personal accident policy developed in partnership with Hollard Insurance Group of South Africa; and a Livelihood Protection Policy, which offers coverage for lost income due to weather-related events.