Feb 2012 Financial News

GraceKennedy to launch micro-insurance

Feb 15, 2012

GRACEKENNEDY is looking to launch Jamaica's first micro-insurance product next month.

Customers of the conglomerate's Bill Express outlets will be offered coverage of their utility bills against disability, unemployment or death.

For just $200 a month, they will be able to insure their electricity bills for three months. An extra $50 will cover their water bills as well and a further $50 will protect those two plus their phone bills.

"With all our products, we'll be trying to ensure the premium comes in at a price where the customer says: 'Wow'," said Elizabeth Chung, the marketing manager for GraceKennedy's Jamaica International Insurance Company (JIIC).

Results from a recent pilot project are still being analysed, she said, but the overall response was positive. "We are encouraged. The customers are interested in and like it and are willing to pay for it. We are definitely looking at full speed ahead."

Only a quarter of Jamaicas 2.5 million adults are properly insured, she said, which leaves a huge potential market.

The concept is still in its early days, but the company eventually hopes to be able to offer other kinds of micro-insurance, including coverage of individual high-value electronics and other goods.

"We'd love to do a whole range of products," said Chung, adding: "We are looking at cellphone insurance." Currently, phone coverage comes only as part of home insurance, which can cost an annual $25,000, payable all at once.

"There are lots of things people would like to insure," she said. "They say to us: 'Why can't I insure just this?' "

Instead of having to identify $1 million worth of assets to cover under a home insurance policy, the customers could pick and choose which things they wanted cover.

"If all that matters to you is your flat-screen television, then we could offer a product where you'd pay a small amount on a monthly basis."

The new financial initiative, which has been under development for five years, was devised with the help of micro-insurance pioneer Hollard, South Africa's largest insurance company with six million policyholders.

Similar products, which are based on the micro-finance model, are also available in places such as India and South America.

JIIC also worked closely with its regulator, the Financial Services Commission, to make sure it could sell the product under its current licence.

The company, the watchdog and the Development Bank of Jamaica are also looking at the concept of selling micro-insurance together with the high-value goods they cover.

People buying furniture, for example, could in theory pick up a fire and theft policy at the store's checkout.

"We'd love to be able to use supermarkets," Chung said. "In South Africa, insurance is available on the shelves."

GraceKennedy is aggressively expanding its financial services, with particular emphasis on customers who may never have dealt with an institution before.

On Monday it opened a one-stop financial centre in downtown Kingston at the corner of Duke and Harbour streets.

As well as a JIIC office, the $120-million centre will host a branch of First Global Bank, First Global Financial Services, and a call centre, creating some 30 new jobs.


Source:
BY PAUL RODGERS Business Editor
rodgersp@jamaicaobserver.com
Jamaica Obserer
Wednesday February 15, 2012

http://www.jamaicaobserver.com/business/Just-protect-my-flat-screen-TV_10771041#ixzz1mSOHGg3N