Guardian Life Limited, the second largest of five life insurance businesses in Jamaica, is looking to drive revenue growth, and has decided that innovation is the best strategy to get there.

Guardian, of Trinidadian parentage, does half the amount of business as chief competitor Sagicor Life Jamaica, whose owners are in Barbados.

"We intend to become more aggressive on new product development which will be one of the focus to drive revenue going forward," said Emma Thomas, vice president of sales and marketing at Guardian Life.

With in excess of 170,000 clients on the books of Guardian Life, Thomas said that by the end of 2009 new product development is expected to contribute at least 33 per cent to premium income.

Last year, Guardian Life, run by president Earl Moore, made $6.4 billion, of which net premiums contributed $3.7 billion. This position, however, indicated an erosion of income

In 2006, total revenue reached $7.3 billion of which net premiums contributed $4.3 billion.

The company also paid out $2.6 billion to policyholders in 2007, a 22 per cent increase over the prior year.

Guardian too is facing a new challenge - Sagicor has already chalked up revenues of more than $14 billion so far this year, compared to $12 billion for FY2007, and still has another quarter to go.

Additionally, the Richard Byles-led company is about to grow even more through acquisition.

Got the go-ahead

Sagicor Jamaica has got the go-ahead from regulators, the Financial Services Commission (FSC), to buy up the health insurance business handled by Blue Cross of Jamaica.

Having passed that test, and although the final approval from Finance Minister Audley Shaw is needed to complete the deal, Sagicor's triumph means that the life insurance sector will be redefined from five to four players - the others being NCB Insurance Company, and Scotia Jamaica Life Insurance Company.

So Guardian now has two impetuses for growth, and has already begun its hunt for business.

Since the start of the year, the company has launched two new products, the latest being a renewable and convertible term plan call Five for Life, with plans for a remodification of an existing product for the market before the end of the year.

Five for Life which was launched in October is projected to contribute 10 per cent, or about $30 million to $40 million to premium income by the end of the year.

For the year 2009, Five for Life is projected to contribute no less than 20 per cent to premium income.

The five-year policy is designed to provide minimum coverage of $4 million for persons between the age of 18 and 75.

At the end of the five years it can either be renewed or converted to a permanent plan.

Premium payments

A special feature of the policy is that on making premium payments clients will receive magna reward points.

Magna is a loyalty reward programme that processes in excess of $30 billion in redemption points annually.

In September, the insurance company also added the Guardian Care non-medical plan which covers 10 major illnesses - blindness, coma, paralysis, multiple sclerosis, deafness and loss of speech, cancer, stroke, major burns and heart attack.

A policy which has a minimum sum assured of $500,000 and a maximum of $1.5 million.

The company expects Guardian Care to contribute approximately $25 million in annualised premium income by December 31.

While no specific date was given for their rollout, at least two additional products are in the pipeline.

Another 16 per cent

These two combined, the company said, should add another 16 per cent to revenues.

Guardian has invested at least $2 million in new product development this year.

"The amount for next year depends on a number of things that we are trying," said Thomas

Thomas

"It will depend on the structure of the strategy we take - for example, we are looking at partnership which will bring a different cost structure," she said.

Guardian Life has a 24.4 per cent share of the life insurance market, measured the company said in terms of annualised premium income, generated from its suite of 12 products.

sabrina.gordon@gleanerjm.com