Jun 2014 Financial News

Sagicor T&T Strong. General insurer earns $230 million in gross premium income

Jun 26, 2014

Despite the Clico debacle and the slow growth of T&T’s economy after the global financial crisis, Sagicor General Insurance Inc (SGI) has positioned itself in the T&T insurance market, by achieving $230 million in gross premium income in its T&T branch, for the 12 months ending December 31, 2013. The company employs 85 permanent employees in its T&T operations.

Though fourth place as at December 2012 when it comes to gross premium income, SGI has maintained an AM Best Rating of A excellent since June 2002. The asset base of the entire company is $681 million and the company’s T&T operations accounts for about 50 per cent of that amount.

Dyan Loutan-Ali, vice-president, T&T operations, said compared to other companies in T&T’s insurance market, SGI has done very well, since it began operating here 10 years ago. She added that having a strong brand has contributed to the company’s high achievement.

“The T&T (insurance) industry is like a billion-dollar industry. In terms of Sagicor General out of Barbados, T&T was the appropriate place to launch because of the potential growth, the economy was doing well, construction was up and coming, and it was just the correct timing.”

Referring to the current insurance legislation, Loutan-Ali said changes had to be made to company’s operations in order for SGI to be compliant with the legislation.

Regulations are required in the market but “it can be onerous especially when people look at the fines and the potential imprisonment.”

Asked whether companies in the insurance sector are paying the price for what happened at Clico, she said, “partly.”

She said the first draft of the insurance bill was crafted before the Clico debacle and it would be wrong to say the legislation was in response to the debacle.

Loutan-Ali said she supported the clause in the new legislation indicating that insurance companies must have more capital.

“We need the capital adequacy to ensure that policyholders’ commitments are always met.”

The situation is different for foreign insurers as they are require to have more capital in order to be compliant with the legislation.

Asked what were some of her challenges, she said legislation.

“I am not sure it will come on stream this year. Every year we hear that it is going to be enacted. It challenges us in terms of always being vigilant in how we manage our business, to make sure we can meet those capital requirements.

“Staffing is also a challenge not only to us, but the industry as a whole. How we treat with this decide how the industry goes forward. We have to invest in our people to make sure we survive.”

Competition is one of the factors in SGI’s external environment. Even though Assuria has bought GTM Life which sells general insurance, she said Assuria is competition for SGI and for the future, Assuria “will be a force to reckoned with, and it’s something which we have to keep our eyes on.”

Asked to differentiate SGI’s products from the company’s competitors, she said: “The general insurance products are really more homogenous on the market. It all depends on how wide your coverage is. We do have superior products. Our motor product is an excellent product. Our house product is an excellent product. The difference is the wide coverage that we sell. Our pricing might be slightly different.”

The entire industry also faces the issue of extreme price sensitivity of the local market to general insurance.

“In the T&T market, it is always a problem in terms of how we buy or how we purchase general insurance. Customers tend to only look at premiums in the beginning. It is tested when you have that claim. Remember, a claim is governed by what you have bought on your policy contract and many people don’t read it,” the insurance executive said.

If a customer does not read the policy contract properly, when it is time to make a claim the customer may realise the coverage they paid for is not what they wanted in the first place.

While not disclosing details, she said SGI plans to reveal a new product by mid-August and another by the end of the year.

Brokers contribute 67 per cent of SGI’s overall business. Offering home, motor vehicle, commercial business, liability, marine and travel insurance, Loutan-Ali said the company did not focus on one class of insurance because it needed to satisfy the demands of its customer base.

And the company does have its eyes fixed on continuing to generate business in the local market and sees its products as being appropriate for all adults.

The young person starting to work has not proven to be a “large” market for SGI but “there is demand.” She added that SGI has not crafted a product specific to that niche market.

Asked what percentage of SGI’s business comprise young working person, she said: “I would say less than one per cent of our market share, in terms of our premium income. Even in our claims side, people say young people are the one who cause the accidents but we have not really seen that in our statistics.”

For Loutan-Ali, success is as a result of leadership in the company. Her team comprises: Dexter McKnight, assistant vice-president, underwriting; Felix Gomez, claims and Deborah Romeo, finance.

Interest in Clico?

Asked whether SGI was looking to purchase any of Clico’s assets:

“If it’s Clico in terms of life (insurance), then, Sagicor Financial(the parent company) will look at that, because we don’t sell the life (insurance). The general aspect of the Clico group is the Colfire.

“Sagicor General is always looking at those opportunities, not only in T&T but up the islands. If we think it is feasible and we have the opportunity, yes, we would bid for it.”

If the acquisition happens, the Clico brand would be merged under Sagicor and not under the Clico brand.

About Sagicor

• Sagicor General insurance Inc has grown out of a Barbados-based company founded over 130 years ago on May 3, 1880 and was then known as the Barbados Fire Insurance Company

• In 2002, Sagicor Financial Corporation through Sagicor Life Inc acquired the majority shareholding (53 per cent) of SGI

• July 16, 2003 the name of the company was changed to Sagicor General Insurance Inc and began its integration into the Sagicor family

• In 2004, Sagicor General Insurance Inc branch office in T&T was established

• SGI operates in Barbados, T&T, Dominica, Antigua and St Lucia


Source:
NADALEEN SINGH
nadaleen.singh@guardian.co.tt
BG4 and BG5
BUSINESS GUARDIAN www.guardian.co.tt JUNE 2014 • WEEK FOUR
Thursday June 26, 2014