Partners with South African firm
Avia Collinder, Business Reporter
Jamaica International Insurance Company (JIIC), the general insurance subsidiary of GraceKennedy Limited, has rolled out two micro-insurance products on Tuesday for medical and weather-related coverage.
JIIC has partnered with underwriters Hollard Insurance Group of South Africa and GraceKennedy Money Services in its push to carve out new business from what GraceKennedy group CEO Don Wehby describes as an underserved market.
The new offerings, GK-AMed, for coverage of medical expenses, and the weather-based Livelihood Protection Policy (LPP), both represent a diversification of JIIC's business lines.
JIIC eventually aims to earn as much as 20 per cent of total revenues from micro-insurance, according to Wehby, who says the company now does US$40 million of business annually.
That 20 per cent target would amount to US$8 million or more than J$800 million today.
JIIC also aims to grow its client base, which stands at 250,000, and is looking to tap into the 500,000 clients who use GraceKennedy's bill-payment services, it said at Monday's product launch.
JIIC Managing Director Grace Burnett defines micro-insurance as "the protection of low income persons against specific perils in exchange for regular small premium payments proportionate to the likelihood of the cost of the risk involved".
The company's first micro product was BillProtect, which was rolled out in April 2012 to provide personal accident insurance that pays bills for customers of GraceKennedy's bill-payment subsidiary Bill Express.
JIIC is awaiting approval from insurance regulator, the Financial Services Commission, to launch a fourth policy covering mobile phones targeted for year end, according to Burnett.
Burnett said the company has secured partnership with one of the local telecoms, but declined to provide any more information.
JIIC manager of customer experience and innovation, Elizabeth Chung, said J$18.5 million has been spent product development to date.
The insurer aims to sign 10,000 subscribers of supplemental health coverage product by year end 2014, with 20 per cent annual growth expected thereafter, said Chung.
GK-AMed, which is described as personal accident policy and not health insurance, attracts a premium of J$500 monthly and promises to cover expenses for specific types of medical expenses following an accident.
The livelihoods protection policy promises coverage between J$50,000 and J$500,000 with premium payments of $5,000 annually for each unit of J$50,000 purchased.
The policy was developed by regional insurer CCRIF and partners and is being executed in various Caribbean markets through national insurance partners.
As first reported by the Financial Gleaner in August, LPP is a pioneer product and the first retail weather-based insurance product to be targeted at individuals.
LPP is based on parametric modelling, which means payouts will be triggered not by severity of damage, but on preset conditions relating to the intensity of the weather event.
Payout will only flow if the pre-set triggers are activated and policyholders will be advised via text message when a payout is made to their bank accounts.
JIIC previous said LPP would likely hit the market by year end. On Monday, it said, testing of the product continues in St Thomas.
Bill Express, which falls under the GraceKennedy Money Services division, will act as collection point for premiums from micro-insurance.
Underwriting partner Hollard is described as the largest independent, privately owned insurance group in South Africa covering both life and short term or non-life insurance.
GK said Hollard is seeking to expand into low-cost asset insurance, including housing and health provision outside of South Africa, as well as parametric pricing products.