GraceKennedy confirms acquisition of Key Insurance

GraceKennedy has confirmed its acquisition of 65 per cent of Key Insurance Company. 

The acquisition follows its January 20 announcement to acquire 80 per cent of the company.

The acquisition further bolsters GraceKennedy's presence in the insurance market. It co-owns health insurers, Canopy with the Musson Group, and owns GK General Insurance and Allied Insurance Brokers, which are member companies of the GraceKennedy Group. 

GraceKennedy's chief executive officer, Don Wehby, said the board’s top priority is to turnaround the company from its current loss-making status. He said a team, headed by GraceKennedy Financial Group's (GKFG) chief operating officer, Steven Whittingham, will be presenting a two-year strategic plan for the board's approval.   

“We are confident that the strategy will support this. GraceKennedy is also committed to capitalising the company in order to achieve the growth targets. In line with this strategy, being listed on the main market would support the achievement of this objective,” he added.

He noted that the plan has four strategic drivers with clearly defined deliverables. The identified drivers are sustainable growth and innovation, consumer centricity, improved business processes for greater efficiency and a performance-driven culture, underpinned by strong change management principles.
  
“At GraceKennedy’s recently held investor briefing, I indicated that the Key brand is strong, and well respected in the Jamaican market, and that we feel it will be a success story for GK. Now that the deal is completed, we can roll out the strategy to [ensure] that this comes to fruition,” said Group CEO, Don Wehby in a release.
  
GraceKennedy says the acquisition of Key Insurance is part of the group’s plans to further strengthen and expand its financial services division. It says it forms part of the company’s larger strategy of mergers and acquisitions as a strategic driver for growth.   

In a story carried by The Gleaner in January, the company had indicated that the takeover of Key Insurance would create opportunities for synergies GK General Insurance, which was operating as a rival to Key Insurance prior to the takeover. 

“Thus, GK General will be able to offer coinsurance opportunities to Key in the property segment, as a means of rebalancing Key’s insurance portfolio,” GraceKennedy had said in a circular.

Key Insurance, was established in 1982 and is listed on the Junior Stock Exchange. It has offices in Kingston, Portmore, May Pen, Ocho Rios, Montego Bay and Mandeville.   

The company's have consistently grown over the past decade, except for one year, 2013. Over that same period, it booked underwriting losses in each of the 10 years.

During the year ending December 2018, Key breached a key solvency test, the Minimum Capital Test (MCT), and had to present a five-year turnaround plan to the Financial Services Commission.

However, the insurance company began reporting progress on its MCT measure last year. GraceKennedy had indicated in January that it would shore up the company, if necessary.

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