Apr 2016 Financial News

Insurance adds $100m to Scotia’s earnings

Apr 14, 2016

Scotia Life of T&T (Scotia Insurance) earned more than $100 million for its parent company Scotiabank of T&T in 2015, strengthening the financial institution’s position, while improving dividends to shareholders. The nation’s third largest insurer posted another strong performance for the period under review to boost after tax profits, said managing director Robert Soverall.

Financials announced at Scotiabank’s Annual General Meeting held at the Hyatt highlighted the subsidiary’s financial health. In the 12 years since it commenced operations, Scotia Insurance has grown at an annual rate of 20 per cent per.

Soverall said: “In 2015, we contributed 20 per cent of Scotiabank’s after tax earnings in T&T. So, from the public financials, you would see that Scotiabank made $566 million. Scotia Life contributed 20 per cent of that.

“Scotia Insurance made $110 million after tax in fiscal 2015. It’s a business we have found to be very complementary to the banking business and customers are already very comfortable with the risk profile of Scotiabank.

“Scotiabank is one of the top 20 banks in the world. We found that the insurance business is just another financial services product customers’ need in their financial planning. Our customers have found us to be very attractive.”

Soverall said Scotia Insurance started in April 2004 “at ground zero” and has grown gradually.

“We haven’t acquired portfolios from anybody. It’s all been organic growth, so that we have been growing at fairly high double digits to the point where we have now surpassed a number of the smaller insurance companies.

“There are only two life insurance companies with gross premium income larger than Scotia Insurance.”

Soverall said the organic approach was working well for Scotia Insurance. There are challenges when acquiring the portfolios of other companies, he said, but Scotiabank is always on the look-out for good investments and will consider them, without any commitment, if they add value to the business.

While the company’s retirement savings and children education products have done well, there is also the universal life–which allowed clients to accumulate funds and have insurance protection and a retirement product that could be registered with the board of Inland Revenue. Policy holders get the tax relief up to $50,000 on a registered annuity.

Soverall explained, “We believe that in times when people are concerned about the economy, there is a role for insurance companies to play in helping people to prepare for those difficult times that may lie ahead.

“What you might find is, for pure protection products: life insurance and funeral insurance, customers may see that as an expense that is discretionary and in difficult times they may cut back on those products. But the saving type products like universal life, which is a combination of protection and saving, people tend to gravitate towards those products and may invest more in those products. They can build a larger emergency fund or a nest egg for the future.”

There are no plans for a roll out of new products in the immediate future but Scotia Insurance agents are educating existing and potential clients about the policy which addresses final rights without burdening children or dependants.

“That’s selling very well. We also started a high coverage universal life product with a critical illness rider, because a lot of people –while deaths benefits are important to take care of their dependents.

“A lot of our clients are also concerned about living benefits, so in the event they were diagnosed with critical illness they can take care of the medical expenses and have a comfortable life,” said Soverall.

Source:
Sean Nero
Trinidad Guardian
Thursday April 14, 2016

http://www.guardian.co.tt/business/2016-04-14/insurance-adds-100m-scotia%E2%80%99s-earnings