Jamaica’s Key Insurance Company Limited will embark on raising new capital through a rights issue after the passing of a resolution at its virtual annual general meeting last Friday, through which it received shareholder approval for the course of action.
“We wanted to ensure that our shareholders were afforded every opportunity to effectively participate in making these crucial decisions about our company’s future, despite the constraints arising from COVID-19,” General Manager Tammara Glaves-Hucey remarked.
“Hosting the AGM virtually allowed us to do this, and we were happy to be able to connect with our shareholders on these important proposals yesterday,” she added.
In January this year, when announcing GraceKennedy (GK) Group’s intentions to acquire the insurance company, Chairman Don Wehby said the consumer goods and financial services conglomerate also had plans to “to properly capitalise it (Key Insurance), and maximise shareholder value”.
Following GK Financial Group’s acquisition of an additional 65 per cent of Key Insurance in March, Wehby assumed chairmanship of the board of directors of the insurance company. With a new board in place, he also outlined the company’s new strategic objectives — sustained growth and innovation; consumer centricity; improved business processes for greater efficiency; and a performance driven culture.
With the resolution passed, Wehby pointed out that, “Since GK acquired Key earlier this year, the board of directors has been focused on the development and implementation of a series of strategic initiatives, including improving the company’s customer centricity and underwriting practices, adopting more effective risk management practices and enhancing its investment returns.”
He also expressed optimism in the Key Insurance’s prospect while undersoring his confidence in the management team to maximise the company’s full potential and shareholder value.
“I want to thank the market and shareholders for showing confidence in the board and the management of Key shown by the increase in the market capitalisation of the company”— Don Wehby, chairman, GraceKennedy Group and Key Insurance Company Limited
On April 8, Key Insurance graduated from the Junior Market of the Jamaica Stock Exchange to the Main Market.
Since GK’s acquisition of the company, Key Insurance has increase its shareholders to a total of 501 of October 21, 2020 — adding 330 new shareholders. In addition, market capitalisation for the insurance company has grown by a 357 per cent, from JM$774 million to JM$3.5 billion; reflected in the increase in its share price, from JM$2.10 pre-acquisition in March 2020 to J$9.60 on October 21, 2020.
“I want to thank the market and shareholders for showing confidence in the board and the management of Key shown by the increase in the market capitalisation of the company. I can assure you, as the chairman of this company, that we will not let you down in terms of your confidence in us,” said Wehby shared during his AGM presentation.
While reflecting on GK’s decision to acquire Key Insurance the chairman noted several considerations. Among them, he highighted the subsidiary’s potential to increase market share, the significant synergies which exist between its business and GK’s financial services division, the possibilities of developing specialised Key motor and home insurance offerings, and the strength of the Key brand in Jamaica.
Wehby outlined, too, that the acquisition fits into GK’s Financial Group’s expansion strategy in Jamaica and the English-speaking Caribbean.
In terms achievements, he said the financial group had taken several steps to improve Key Insurance’s profitability. These include stopping accumulated losses and loss of market share through the implementation of a 90-day turnaround plan, as well as the development of a two-year strategic plan which will provide an attractive return on investment to shareholders.
The aim of the approved rights issue and increase in share capital therefore form part of the board’s plan to achieve these objectives.
Key Insurance has offices across Jamaica located in Kingston, Portmore, May Pen, Ocho Rios, Montego Bay, and Mandeville.