Securing Your Future Is Our Main Investment

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Financial News

Oct 2004 Financial News

Grace, Kennedy and Guardian Life Limited Joint Venture

Oct 11, 2004

BLUE CROSS and Life of Jamaica/First Life are to face a major new competitor in the health insurance business within the next six months.

Grace, Kennedy and Guardian Life Limited are establishing a joint venture company to take on the two big players in the field, said Earl Moore, president of Guardian Life Ltd. He said the partners plan to transform the sector.

"We are going into the health business," Mr. Moore said. "We are aiming to grow it."

Mr. Moore said, "With more competition, consumers will get a more competitive rate."

The new company plans grab market share by offering customers better values.

SUPERIOR TECHNOLOGY

"We have seen from other industries where service fees go up when there is limited competition," Mr. Wehby said. "When there is more choice costs go down."

To operate at these more highly competitive levels, the new venture will use superior technology to take on the incumbents, Mr. Wehby said.

Guardian Life has become very conscious about revenue growth and cost control, Mr. Moore said. This cannot be achieved by just adding more staff.

"The only way you can compete in a particular niche is with superior service," Mr. Moore said. "We are stressing operational excellence in terms of how best we can use technology to provide the maximum service to our customers."

There is a cost factor to be dealt with in entering the health insurance business, "But we have an advantage as a newcomer in that we can learn from the two who are in the market," Mr. Moore said.

The result is that they have selected latest technology in health care system, the Grace executive said. "That will give us a competitive advantage."

ONLINE SERVICE

Some services will be offered over Internet, Mr. Wehby said. "A lot of online information will be made available so customers will be able to do their own research on Internet."

Mr. Moore said the partners were now dealing with regulatory issues involved in entering health insurance. But several other matters had already been settled.

Ownership of the venture will be split evenly between Grace and Guardian, said Don Wehby, chief financial officer and chief operating officer in the Financial Services Division of Grace, Kennedy and Company Limited.

"We just bought the Grimax building," Mr. Moore said. The new company will be housed at the premises which had been used by Grimax Advertising Limited.

"We have employed people and started putting things together," Mr. Moore said.

Mr. Wehby said the future of this new business was underpinned by the fact that Guardian's parent company, Guardian Holdings, was already involved in the health insurance field outside of Jamaica.

In the medium term, Mr. Wehby said, it was planned to expand the new health insurance service into the Turks and Caicos Islands, The Cayman Islands and Belize.

Source: Jamaica Gleaner