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Financial News

Mar 2009 Financial News

$9-billion insurance pull-out - Guardian grows despite increased policy encashment

Mar 11, 2009

Faced with the collapse of the unregistered investment schemes, which cost them billions of dollars, Jamaicans last year encashed nearly $9 billion in life insurance policies, a top industry official, Earl Moore, has reported.

These encashments, 16 per cent higher than in 2007, apparently did not impact the performance of Moore's company, Guardian Life Jamaica, which he said increased its income by a quarter, to $8 billion, or eight per cent higher than the industrywide growth.

However, Moore, the company's CEO, in a recent speech at Guardian's annual awards ceremony, did not disclose the profit performance of the privately held firm, which is a subsidiary of the Trinidad and Tobago-based Guardian Holdings Ltd.

Net group profit

Full-year performance data for individual insurance companies for 2008 have just begun to emerge, with the publicly listed Sagicor Jamaica reporting net group profit of $4.5 billion, a 33 per cent increase on the previous year. Sagicor reported that $1.8 billion of its profit came from employee benefit business, while approximately $41.1 billion was from individual life.

However, in his remarks to Guardian's employees, Moore suggested that the industrywide performance for the life sector was spotty and, in some areas, disappointing.

Marginal increase

For example, new business, at $3.3 billion, increased a marginal three per cent on 2007, while total revenue of $19.54 billion, was up 17 per cent or just around the level of inflation.

The life insurance industry paid out benefits of $10.12 billion, 13 per cent more than 2007.

"Insurance Association of Jamaica statistics confirmed increased levels of encashments, $8.7 billion or 16 per cent," Moore said. "This is attributable to the demise of the operations of unregistered financial organisations such as Cash Plus and Olint and the reduction in remittances from the United States which has impacted the disposable income of many Jamaicans."

Traditional market share

With regard to his own firm, Moore said that it largely performed better than the industry. Guardian, he said, registered annualised premium income of $832 million, which was a three percentage point increase over the 10 per cent rise for the industry in 2008.

The company, he said, grew its "traditional market share" of the life business by 1.4 per cent to 38 per cent, remaining in second place behind Sagicor Jamaica.

On the group health side of its business, Moore said that Medicus, Guardian's vehicle for this segment of the industry, grew its annualised premium income 236 per cent.

Jamaica Gleaner
Wednesday March 11, 2009