General Accident looks to region for more strength
Coming off a record year of premium income and net profits, General Accident Insurance Company is looking to maintain momentum in the pandemic by expanding its footprint in the region.
Last year, the company earned $10.615 billion, a 20 per cent gain that came on the heels of it acquiring a majority stake in Motor One in Trinidad & Tobago last September.
Since then, General Accident has been pushing ahead with its expansion programme, notwithstanding the sweep of the coronavirus. Since this year, the general insurer acquired another 10 per cent of Motor One, bringing its stake to 65 per cent, and announced receipt of an insurance licence to operate in Barbados, where it is looking to add to its growth through partnership with BCDL Holdings Limited.
The General Accident Barbados subsidiary is 80 per cent owned by General Accident and 20 per cent by BCDL Holdings .
General Accident’s Chief Operating Officer, Greg Foster, told the Financial Gleaner that the two Motor One transactions amounted to $348 million. As for Barbados, that operation launched into business four months ago from the Dome Mall in St Michaels, and is manned by a staff of three.
The team there has been making “very good progress, so far, in writing business since the early-May 2020 opening,” Foster said on Friday.
The previous day at the General Accident virtual annual general meeting, the COO credited the company’s regional push for last year’s income gains.
“This strong performance resulted in a more than doubling of underwriting profit ,where we ended the year with $442 million,” Foster told the company’s shareholders at their annual general meeting on Thursday.
“We also saw an improvement in our investment income of 30 per cent even against the background of depressed yield on investment. Our profit before tax doubled to $770 million, resulting in a profit after tax of $652 million of which $559 million was attributed to General Accident shareholders,” he said.
However, Foster said that the onset of COVID-19 presented particular challenges for General Accident. Reporting on the first six months of 2020, he told shareholders that gross written premium was down slightly to $6.21 billion compared to $6.56 billion in the prior year. This resulted in reduced profit of $112 million, compared to $135 million in the prior year.
Strategically, over the last two years, General Accident had gone after the public-passenger business both among contract carriers operating in tourism and commuter transport. But with the closure of all ports and the slowdown of the transportation sector during the COVID lockdown between March and June, operators were hard put to continue paying premiums, the COO said.
“We have seen a fall-off ,especially in our PPV book of business. We have extended discounts and payment plans to our affected policyholders to ensure they maintained their coverage. We have seen a spike in our receivables as our client’s businesses have been affected,” he said.
In response, he told shareholders that General Accident’s management is changing the way it does business in the midst of a pandemic to adjust as needed to changing conditions.
General Accident has been investing heavily in upgrading its IT infrastructure over the last 18 months. Foster says this has allowed the company, in a time of social distancing, to continue serving clients through its digital platforms.
“We are very mindful of the impact the pandemic has had, and continue to have, and we have adjusted our operations accordingly,” he said.