JIIC, COK insurance partnership
Published:Friday | October 28, 2011 | 12:00 AM
Jamaica International Insurance Company (JIIC) estimates that it can grow premium income by as much as 15 per cent by targeting companies with large pools of customers with insurable assets.
On Wednesday, the general insurance company signed off on the first such partnership agreement with COK Sodality Co-operative Credit Union, buying access to its pool of 265,000 members.
JIIC, a subsidiary of the GraceKennedy conglomerate, is offering COK members a 10 to 15 per cent discount on premiums and an automatic renewal feature, as well as speedier processing times for insurance.
JIIC sells motor, property, and liability coverage.
COK manages a portfolio of J$4.2 billion in savings and J$7.2 billion in total assets as at October 2011.
Motor vehicle loans account for 40 per cent of the credit union's J$3.4-billion loan portfolio.
COK, under the arrangement with JIIC, will serve as a single location for motor vehicle loans, premium financing and issuing of documents. The insurance will be processed electronically by JIIC agents.
Ahead of profit target
Winsome Gibbs, business development manager with JIIC, said Wednesday that a minimum 10 per cent growth in premium income is expected from this and similar deals.
"We are currently ahead of our profit target for 2011, and also ahead of comparative profit figures for September 2010," said Gibbs.
JIIC's gross premiums for 2010 were near the J$4-billion mark. Net premium income rose to $1.726 billion, up $51 million from J$1.675 billion in 2009. Profit, however, fell by about J$110 million to J$77.746 million in 2010.
A technology interface will provide loan managers at COK with product access, the parties said. The deal will cost the insurance company in marketing, technology and staff - no new hires are planned.
The size of the investment was not disclosed, but Gibbs said the heaviest costs would be for promotions.
"Whatever we can do to mitigate against any risk we face should be done, which is why this is a great idea," said Group CEO of GraceKennedy Don Wehby.
"Too often when some car loans go bad you find out that the vehicle is uninsured," added chief executive officer of GK Financial Group Courtney Campbell. "The automatic renewal feature of this deal for COK loans will minimise this exposure," he said.
Campbell said the arrangement with COK was one of "several associations being pursued with other financial institutions with good customers - people who have assets to insure."
The company hopes to sell COK members both motor vehicle and other classes of insurance.
Chief executive officer of COK Jacqueline Mighty says that the door remains open to negotiate commissions from JIIC but that currently no income is being shared.
"Its not just about financial returns, it's about risk. The insurer will provide information about membership and also provide immediate security for our loans," said Mighty.