Jamaica insurance sector on a positive track

Jamaica’s insurance sector continues to expand, with total assets just shy of the $600-billion mark and capital buffers showing improvement, the Financial Services Commission, FSC, indicated in its June quarter review of the sector.

Asset growth was estimated at over 10 per cent by the regulator, year-on-year, having gained $56.5 billion to reach $598.3 billion. The majority of those assets, $490 billion, was held by life companies, and that figure in turn mostly comprised investment assets valued at $443 million.

The majority of the life sector’s investments are held in the form of bonds, amounting to $288.38 billion, as of June, the FSC review indicated. Equities holdings were estimated at $61.31 billion.

The sector comprises 17 registered operators, six in the life segment and 11 general insurance companies. Ten of the general insurance companies were fully operational, while one operated as a branch, the FSC explained about the entities captured in its report.

The FSC attributed the asset growth primarily to increased investments, dominated by bonds, followed by other fixed-income instruments and a modest allocation to equities. Both the life and general insurance segments posted year-on-year gains.

“The life insurance sector remained solvent and adequately capitalised,” the regulator noted in the review, adding that all life insurers exceeded the 10 per cent regulatory solvency benchmark and doubled the 100 per cent LICAT, or life insurance capital adequacy test, with a robust 208 per cent ratio.

For the life sector, industry profit before taxes grew by 36 per cent, “driven by improvements in revenue”, the FSC said.

Pre-tax profit in the June 2025 quarter amounted to $11.9 billion, up from $8.8 billion. Net profit improved by 41 per cent, from $6.9 billion to $9.7 billion.

Financial conglomerate Sagicor Group Jamaica Limited, operator of leading insurance company Sagicor Life Jamaica, reflected this momentum in its quarterly and six-month results. For the half-year, Sagicor Group, a publicly listed company whose operations include banking, investment banking and property services, reported a $8.7-billion profit, more than double the $4 billion recorded a year earlier.

“This performance was driven by meaningful growth across all major business lines and a rebound in our asset portfolio, which recorded unrealised gains, compared to the prior year’s losses,” the group said in its financial report.

In the FSC review, insurance revenue for the life segment climbed by 14 per cent, year-on-year, or by $5.2 billion, to $42 billion.

While outperforming its position relative to June 2024, the current outturn is substantially lower than the $56 billion recorded at September 2024 and $78 billion at December 2024.

That track also holds true for the life sector’s earnings, with each of the last two quarters of 2024 delivering better profits.

Meanwhile, the general insurance segment — primarily motor vehicle and home coverage — recorded $2.6 billion in pre-tax profit over six months to June, a 62 per cent increase over the prior year. It came on the back of a 5.7 per cent, or $2.5 billion, increase in insurance revenue, the FSC said.

The general insurance industry also remained solvent and well-capitalised.

“All companies reported solvency ratios above the 25 per cent minimum requirement,” the regulator stated, adding that the sector’s weighted average Minimum Capital Test, or MCT ratio, stood at 186 per cent, well above the 150 per cent regulatory benchmark.

steven.jackson@gleanerjm.com