Customer retention strategies bearing fruit

Durrant Pate/ Contributor

Caribbean Assurance Brokers (CAB) is reporting success in normalising its revenues, which have gone up by 10 per cent during the nine months ended September 30, 2022.

Revenues year-to-date amounted to J$432.28 million, up from $392.44 million in 2021 while, for the September quarter, revenues grew to J$237.48 million, up from J$224.40 last year, a 5.8 per cent increase.

Chief Executive Officer Tania Waldron-Gooden said the positive revenue performance is evidence that earnings are being normalised.

“We continue our efforts in focusing on each quarter individually in order to normalise earnings over time. The main focus in the third quarter was executing on customer retention strategies and the associated indicators ultimately bore fruit in an environment of increased competition,” Waldron-Gooden advises shareholders.

She stated that, as the insurance brokerage agency now shifts its focus to the last quarter of the year, it has become integral for the business to focus on new customer acquisition, given the changing economic and socio-economic conditions the country currently experiences.

CAB said it remains steadfast on its strategic plans to improve and add to product/service offerings, which will consequently improve its customer satisfaction index.

Profitability improving

Net profit for the nine-month period increased by J$26 million or 33 per cent to J$104.9 million, up from J$78.94 million, due mainly to the management’s continued execution on its strategic goals of investing in digitisation and data protection/cyber security which was the main contributor to increased expenses.

Operating expenses for the year-to-date came out at J$323.78 million, mainly attributable to an increase of $11.56 million or six per cent in administrative and other expenses when compared to September 2021. Areas that contributed to the increases in expenses included staff costs, product development initiatives, repairs and maintenance, registration fees arising from increased licence and regulatory fees, software licence fees and depreciation on additions to property, plant, and equipment.

Finance charges for the combined three quarters were reduced by $1.4 million (33%), which was attributable to a pay down on principal of mortgage denominated in foreign currency as well as a reduction in interest expense on lease liability.

During the September operating expenses climbed to J$136.3 million, an increase of $14.8 million or 12 per cent when compared to the quarter ended September 30, 2021. Areas that contributed to the increase in total expenses included software and licensing fees as we revamp our approach towards cybersecurity; staff welfare and agents commission expenses (attributable to the increase in revenues).

Total assets and liabilities

Total assets as at September 30, 2022, amounted to J$1.21 billion compared to J$1.12 billion, reflecting a J$90.67 million or eight per cent increase over the corresponding period. The increase in assets was primarily due to a J$58 million increase in cash and cash equivalents, coupled with a J$46.48 million increase in receivables.

These increases were offset by a combined J$14.35-million reduction in property, plant and equipment, deferred tax asset and right of use asset over the corresponding period. Total liabilities as at September 30, 2022 were J$724 million, an increase of J$11.9 million or two per cent over the 2021 corresponding period.

This was driven mainly by an increase in payables of approximately J$48.6 million, offset against a reduction in long-term loan and lease liability of J$28.56 million and J$6.5 million respectively. The increase in the company’s total equity of J$78.75 million was directly related to the increase in profits over the comparative period.