Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Issuer/Corporate Credit Ratings assigned to General Accident Insurance Company Jamaica Limited (GENAC or the Company) at jmA- (Foreign Currency Rating) and jmA (Local Currency Rating) on the Jamaica national rating scale. 

These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors within Jamaica, is good. CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on the high likelihood that over the next 12 to 15 months, GENAC’s profitability would be sustained, albeit at a lower level. 

While insurance revenues are expected to improve driven by an increase in the property business, this is likely to be tempered by increased claims, reinsurance and operating expenses. Should this result in a material decline in PAT in 2025, CariCRIS may lower GENAC’s earnings risk rating. Current expectations are for a turnaround in profitability in 2025 due to GENAC’s current strategy of more selective underwriting, as well as a slowdown in claims inflation. 

The company is expected to remain well-capitalized, with a good asset risk profile, and be able to meet its obligations comfortably over the next 12 to 15 months. The ratings of GENAC reflect its good market position as a long-established player, with a good market share in the Jamaica general insurance industry. Additionally, the company’s good capital adequacy, supported by low-risk retention and a strong network of reinsurers, also supports the ratings. GENAC continues to maintain a moderately diverse investment portfolio, with good returns and liquidity. 

Furthermore, the company’s continued profitability and strong Enterprise Risk Management (ERM) framework also support the ratings. These rating strengths are tempered by concentration risks associated with the Company’s exposure to Jamaica’s economy.

Rating sensitivity factors

Factors that could, individually or collectively, lead to an improvement in the Ratings and/or Outlook include:

• Total Investment Assets/ Policy Liabilities > 1.2 times sustained for 2 consecutive financial periods
• Sustained growth in Profit After Tax (PAT) by > 15% over the next 2 years without adversely impacting capital adequacy and asset quality Factors that could, individually or collectively, lead to a lowering of the Ratings and/or

Outlook includes:

• A 2-notch deterioration of the credit rating of any of GENAC’s top 5 reinsurers by A.M. Best or Standard and Poor’s Ratings Services
• Loss of relationship with any of the Company’s major reinsurers and failure to provide viable replacements
• A deterioration of the Company’s Minimum Capital Test Ratio below regulatory minimum sustained for 6 months
• A 5% fall in insurance revenue
• A 15% rise in insurance service expenses sustained for two consecutive financial periods

General Accident, located in Kingston, Jamaica, commenced operations in the 1920s as agents for global insurer, General Accident Fire and Life Assurance Corporation Limited (GAFLAC), headquartered in Perth, Scotland. In 1981, the majority shareholding of GAFLAC’s agency’s operations was acquired by Musson (Jamaica) Limited (the Musson Group), after which it was renamed and incorporated as General Accident Insurance Company Jamaica Limited (GENAC or the Company) and became a wholly owned subsidiary of the Musson Group. In 2011, 20% of GENAC’s shares were listed on the Jamaica Stock Exchange.

With the exception of the Musson Group, the two largest shareholders as at June 2024 were Mayberry Jamaica Equities Limited and QWI Investments Limited, holding around 3.6% of the aggregate shareholdings of GENAC.

The minority shareholder was General Accident, Perth. The Musson Group is a manufacturing and merchandising group incorporated and domiciled in Jamaica.

In September 2019, the GENAC Group (the Group) acquired 55% of the share capital of Motor One Insurance Company Limited in Trinidad and Tobago (T&T) (Motor One) and subsequently raised its shareholding to 65% in June 2020 and further to 75% in December 2022.

In October 2020, Motor One was formally renamed General Accident Insurance Company (Trinidad) Limited (GENACTT). The Group expects to acquire a regional insurance company headquartered in T&T in 2025. In 2019, the Company also incorporated General Accident Insurance Company (Barbados) Limited (GENACBB), a subsidiary of GENAC, and commenced operations in May 2020. GENAC offers a range of general insurance products including motor, property, travel, engineering, bonds, public liability and marine cargo.

GENAC reported an average profit after tax of J $564.3 million (US $3.7 million) over the last 2 financial years (2022-20234) and the Company’s total assets5 stood at J $9.8 billion (US $62.9 million) as at June 2024.