Andrew Levy, managing director of Jamaica International Insurance Company. - Contributed
Jamaica International Insurance Company (JIIC) continues to look outside of Jamaica to grow its business, citing the need for a greater diversification of its risk which the company acknowledges is too concentrated in one country.
"It's very important for us. Over the last couple of years we have started growing outside of Jamaica , we have gone to the Turks and Caicos Island, we have gone to Dominica and we would like to continue that expansion," said managing director Andrew Levy, speaking with the Financial Gleaner.
"That's one of the primary focus now and to a large degree it will allow us to diversify our risk because most of our risks are in Jamaica, so if we have a hurricane in Jamaica then all risks are affected by that one hurricane."
New products
But the company, which lays claim to 17.2 per cent of the local general insurance market, is also seeking growth through new products.
JIIC has joined the ranks of insurance companies offering products exclusively to women with the launch last week of 'Premier Lady', comprehensive motor insurance cover designed to recognise good driving habits of females.
Two other policies were unveiled at the same time.
"What we are trying to do is increase the policy count to service more and more customers," said Andrew Levy, president of JIIC.
According to Levy, JIIC's customer base stands at about 50,000, a figure he is hoping to increase by 10 per cent over the next 12 months.
JIIC now carries 92 per cent of its risk in Jamaica, and eight per cent overseas.
JIIC does not physically operate in its overseas markets, but sells its policies through agents - Cabrits in Dominica; United Reliance Insurance Company in Turks and Caicos; in St Lucia, its agent is EC Global Insurance Company; and Trident in Barbados.
Trident and EC Global are affiliated companies of conglomerate GraceKennedy Limited, parent company to JIIC.
The level of business the company does overseas was not quantified, but when JIIC entered Dominica last year, it was projected that the company would earn about US$200,000 in gross premium in the first full year of operating in that country.
Eyeing eastern caribbean
That target, however, at J$16 million equivalent, would have been a mere fraction of the J$3.5 billion of gross premiums earned by the firm in 2008.
Levy said JIIC would look to the Eastern Caribbean, including Trinidad and Tobago, and perhaps the Bahamas for new business.
Just last week, AM Best, the rating agency for insurance businesses worldwide, reaffirms its financial rating strength of B++ for JIIC, while at the same time maintaining its 'bbb' rating as an issuer of credit.
The outlook for JIIC's business was stable, reflecting favourable capitalisation, historical profitability and financial flexibility given the support of parent GraceKennedy.
But offsetting some of JIIC's strength was its lack of geographic diversification, said AM Best, suggesting that to them the moves towards overseas expansion were not viewed as being enough to spread its geographic risk.
Additionally, the credit rating agency cited continued challenges in the Jamaican macroeconomic environment and the high cost of reinsurance due to the company's dependence on reinsurance earnings and surplus protection from catastrophic events.
JIIC, which acquired the portfolio of Dyoll insurance when that company went belly-up in 2004 - felled by Hurricane Ivan - is ranked among the big players in the general insurance industry.
Its GPW, however, was down slightly last year at $3.5 billion, from $3.8 billion in 2007. The majority, 80 per cent was motor business.
Net profit rose however by five per cent, from $150 million to $158 million, but the growth was attributed mainly to foreign exchange gains and a jump in interest earned.
At the end of December 2008, JIIC's net worth stood at $1.9 billion, up slightly from the previous year, while total assets rose 18 per cent to $6.4 billion.
sabrina.gordon@gleanerjm.com