Increased profitability during March quarter

Durrant Pate/ Contributor

Jamaican-based regional insurance company, General Accident Group has been hit with increased costs on re-insurance contracts across its three business operations in the Caribbean.

This was a result of a short supply of reinsurance capacity, which has now been addressed with the company being able to renew its reinsurance contracts across all markets in Jamaica, Barbados and Trinidad and Tobago. The management reports that it was able to achieve this feat through its “deep relationship with our reinsurers.”

Chairman, P.B. Scott and CEO, Sharon Donaldson admitted that 2023 started with a shortage of reinsurance capacity, which resulted in increased property rates. In addition, operations continue to be impacted by increased claim costs, resulting from claims inflation.

However, the management is “anticipating that as the year progresses the increased premium rates will have a positive impact on our subsequent results, as the higher premium continues to be earned.”

Positive net insurance contribution

General Accident’s core operation returned a positive net insurance contribution of J$43.8 million for the quarter ended March 31, 2023. The group achieved an after-tax profit of J$53.5 million compared to a loss of J$3.8 million for 2022. 

The highlights for the group are as follows: 

• Insurance Revenue J$2.9 billion (2022: J$2.1 billion) 
• Insurance service result J$43.8 million (2022: J$21.5 million) 
• Profit before tax of J$56.7 million (2022: J$1.8 million loss) 
• Earnings per share of J$0.06 (2022: J$-0.02)
• Total assets of J$9.0 billion (2022: J$8.5 billion)

As of March 2023, General Accident remains in compliance with the capital adequacy and liquidity metrics prescribed by the Financial Services Commission, in Jamaica, Barbados, and Trinidad. The management reports that it “remains focused on cementing our market leadership in Jamaica, growing our operations in Trinidad and Barbados, and placing technology at the core of our operations.”

Insurance Results 

For the quarter ended March 31, 2023, all territories saw increased insurance contract revenues. The company continues to receive positive responses from its Barbados and Trinidad markets, resulting in increased insurance revenues by 57% and 49% respectively over the prior year. 

Investment Performance 

General Accident’s consolidated investment income for the quarter ended March 31, 2023, was J$58.5 million compared to the prior year of J$38.1 million. Investment income benefited from interest rates trending upwards. 

The company expects to see continued improved investment income return as the leadership team continues to efficiently deploy capital to maximize investment returns.