General Accident Insurance Company is looking to its operations in Trinidad and Barbados to push the company’s growth into the future, after admitting it needs to look outside the Jamaican market for growth.
PB Scott, chairman of the insurer, said the operations in the two countries are vital to the company.
“I think when you look at the Trinidadian market, its 50 per cent bigger than the Jamaican market. I mean in Jamaica we are the largest general insurer with 28 per cent market share, so if General Accident wants to grow it has to grow in other markets. We are very excited about the Trinidad market. We have great relationships with reinsurers and we’re seeking to expand more into the Trinidad markets,” Scott said in response to queries from the Jamaica Observer.
In 2019 General Accident acquired a majority stake in Trinidad-based Motor One Insurance and in 2020 it acquired a licence in Barbados and began operating in that country shortly after. Both entities started operating in the midst of the novel coronavirus pandemic and the impact was reflected on the company’s financial statements.
General Accident released results for its 2020 financial year showing its profit dipped 70 per cent to JM$193 million. It has since showed a turnaround in the first six months of its current financial year, with results up to June showing the group’s net profit at JM$230 million. That was up 63 per cent from the result recorded over the same six month period of 2020.
However, the dip in profitability last year does not bother Scott much. “I mean last year, our results weren’t very good, but companies are not made over quarters. We are building a company to be a substantial business over five, 10 years,” he told the Caribbean Business Report.
“We purchased an insurance company in Trinidad and last year was the first it was operated as a subsidiary and we had a lot of start-up costs there and in Barbados. I don’t think our business in Jamaica was suffering because we started companies in Barbados and Trinidad. We decided to build a business organically in those markets and there’s a cost to that, rather than acquiring a business,” he continued.
“If you look at the results and substract the cost for those last year, then there would be little change. We are investing in Trinidad and Barbados to grow them. We are investing in advertising, we are investing in people, we have significant start-up costs.”
Scott outlined that the target is to grow General Accident into being the leading property and casualty insurer in the region, adding that “both Trinidad and Barbados are the largest markets and after we are established in those, we will start looking into new markets.”
As for Trinidad at the moment, he reflected, “There are great companies down there, it could take a while (to build out), it could take 10 to 15 years. I have a long horizon, I’m a young man, I have another 25, 30 years to work and will commit to the company’s growth during that time.”
Despite the challenges due to the impact of the novel coronavirus pandemic, General Accident grew gross written premiums by 12 per cent, produced a 15 per cent return on equity, and distributed over JM$220 million of dividends to its shareholders.