For the first time in its history, insurance company General Accident surpassed J$10 billion in gross written premiums last year.
This represents a 23 per cent increase over 2018, as the General Accident Group wrote more than $10.7 billion in gross premium in 2019, producing net income of $2.4 billion. This net income exceeded profitability targets for 2019 and generated an improved return on equity.
In its just release 2019 annual report, General Accident reported that net premiums earned were $2.2 billion in 2019, a 37 per cent increase over the previous year. Premium volumes were driven by balanced, broad-based growth in all key lines, which was achieved by scaling the business, strengthening the motor insurance franchise and expanding the company’s reach beyond Jamaica.
Last year the company, which has a subsidiary in Trinidad and Tobago, Motor One, produced an underwriting profit of $442 million, which exceeded 2018 by 153 per cent largely due to Motor One’s excellent performance.
MOTOR ONE ANCHORING GENERAL ACCIDENT’S PROFITABILITY
General Accident’s profitability was anchored by the acquisition of Motor One, strong premium growth across major business lines and an improved loss experience. Motor One is a single-line insurer, which has an extensive branch network and a resilient customer base of over 15,000 direct motor polices.
Company chairman Paul B Scott Motor noted that Motor One has had a positive financial impact on its consolidated profits in 2019 mostly related to the favourable terms of the acquisition. General Accident last year acquired a 55 per cent ownership stake in Motor One.
Scott contended that Motor One provides a base upon which General Accident will build a full-service general insurance business in Trinidad, noting that the general insurance market there is 40 per cent larger than Jamaica’s market and presents tremendous opportunity.
Despite the low interest rate environment, General Accident has maintained a prudent investment strategy in 2019, where the group’s investment portfolio stood at $6.1 billion, earning a return on investment of six per cent.
Investment income was up $288 million (including foreign exchange gains) versus $210 million in 2018. General Accident’s investment portfolio is made up mostly of cash and short-term fixed income instruments, which is a function of both regulation and its significant short-term policy liabilities.
Managing Director Sharon Donaldson gave a positive outlook for 2020, stating that “further expansion of our regional footprint is highly probable”.
Looking forward Donaldson said the management team is confident and optimistic about the next five years. She said the management is committed to maintaining its focus on innovation and the use of technology and intend to become ever more customer-centric and leverage its business relationships.