Genac raises outlook on regional businesses

A doubling of gross premiums at the Trinidad and Barbados subsidiaries of General Accident Insurance Company Jamaica Limited, or Genac, is being taken as a encouraging sign that the entities will not only deliver positive returns soon, but could do so ahead of target.

General Accident took over Motor One in Trinidad & Tobago towards the end of 2019, and months later launched the General Accident Barbados subsidiary in April 2020.

The two entities contributed $412 million in gross premium to the group for the first six months of 2021, more than double the $204 million of premiums recorded earned in the similar period in 2020.

Managing Director of General Accident Sharon Donaldson says the company had put a two-year time stamp on at least breaking even in those markets, but is ahead of that schedule.

“Without wanting to give false hope, we can safely say that by the end of the year we should be breaking even in Trinidad. Certainly for 2022 we should be making profit,” she told the Financial Gleaner.

Donaldson describes the T&T market as “ticklish,” especially since General Accident is not itself a local company, and is therefore proceeding with care in its outreach.

“For the time being, especially since COVID-19 has thrown up uncertainties, particularly with the spike in Trinidad, Genac Jamaica will not make any changes. It does not represent a drag on us, and it would not be strategically prudent,” she said.

As for Barbados, which is a start-up operation, the company been spending time on the ground there to get the country acquainted with Genac.

“Our assessment is that by year end we should make the budget, and obviously, the loss ratio is a question for a later time, since this is a start-up; but at this time it is very low,” Donaldson said.

Jamaica growth

The two Caribbean subsidiaries represent a fraction of General Accident’s business at this point. The group earned gross premiums of $7.6 billion for January-June, up 23 per cent over 2020. Jamaica accounted for $7.2 billion of the current out-turn, up from $6 billion in 2020, when the generation of new insurance business was mostly through their online platforms.

“Nobody was going out to solicit insurance business, especially at the level of brokers,” said the Genac head.

The restrictions on movement and resulting constraints on business activity saw profit at Genac dipping to $112 million at half-year 2020, from $135 million at half-year 2019.

For the current period earnings have recovered, outperforming even the pre-pandemic profit, at $174 million.

“We’ve set up sufficient workarounds and that has put us in a good position, with an uptick in business in terms of premium income, and, so far, claims have been low,” Donaldson said. She said, however, that the company’s outlook for the second half of the year remains cautious, given the uncertainties of the virus.

A day after the interview with the Financial Gleaner, Jamaica was pummelled by heavy rains from Tropical Storm Grace, the damage assessment for which is ongoing. Then the next day, the Jamaican Government announced that the feared delta variant of the COVID-19 virus had been detected in Jamaica, with at least 22 confirmed cases.

To bring in new revenue, General Accident is now running a multichannel marketing campaign in all three of its markets, with a dancehall celebrity, DJ Stylo G, as the pitchman. It also features General Accident employees as talent, which Donaldson said has served to bolster the image of her staff and made it easier to do business with their recognisable faces.

“These are the same General Accident staff going out to meet with brokers, where as much as 80 per cent of our business comes from. That has built the relationships, which is good for business,” she said.

The campaign is the same for all three territories, with tweaks for each local market. For example, Jamaica is the only market using television ads in its campaign.

“Our premium income is on track for making budget. We are controlling our expenses because that is within our power,” said Donaldson.

“In the absence of any major catastrophe, we will only be looking at attrition claims. In that case, we should attain our 2021 targets,” Donaldson said.

neville.graham@gleanerjm.com