Globe Insurance, a subsidiary of Lascelles DeMercado, has launched a new revolutionary home insurance policy product called Choices which allows homeowners to choose the value for which they wish to have their properties insured. Other insurance players in the market may well emulate this product because it allows homeowners to make extensive savings on annual premiums while largely matching payouts to sums insured.

Choices comes one month ahead of the official start of the 2008 hurricane season and should prove attractive to many homeowners who are reluctant to adequately insure their homes.

Its unique selling point is the absence of an Average Clause condition. This clause came into effect after Hurricane Gilbert (1988) destroyed many homes and properties. However, Managing Director of Globe Insurance, Evan Thwaites pointed out that the Average Clause had a prohibitive effect, with many homeowners choosing not to insure their properties.

For the better part of a decade Thwaites has maintained that Jamaicans take a blasé attitude to home insurance, which is particularly disconcerting, bearing in mind that the country is prone to destructive hurricanes. Hence Globe saw the need to be creative in addressing homeowners' needs.

Speaking at the official launch of Choices at the Terra Nova Hotel on Tuesday evening, Thwaites said: "What we found is that homeowners want insurance that is affordable, covers their risk and works the way that it is supposed to - that is, it pays their loss. Globe listened to those voices in the marketplace and responded appropriately with Choices."

Another notable feature with this new product is lower catastrophe excess/deductible and all at a fraction of the cost of normal/old-fashioned home insurance.

Globe's Marketing Officer Nadia Mitchell, speaking at the
Terra Nova hotel on Tuesday, explained that homeowners may insure for any amount up to a maximum of 30 per cent of the value of their properties.

"We will inspect your home, free of cost, and this will allow us to offer you the very best cover and price possible - inclusive of a 10-per cent discount on the homeowner's premium for the first year, if there is a current valuation of no older than three years in place and an inspection of the home is not considered necessary."

Speaking with Caribbean Business Report on Tuesday, Globe's General Manager for Marketing, Gordon Arnold said: "Choices is different from the more traditional product where one has to insure for the full replacement value of their house. If you do not insure for the full replacement value, then there are penalties you face. This is called the Condition of Average.

"People have been saying to us, why can't I just insure the roof or a part of the property? What we are saying is that we will give you the option of selecting your sum insured. So if a hurricane came and all it is likely to do is damage your roof, we are saying based on the full value of your house, you have this percentage to insure your roof." Arnold believes that with the premium savings and the ability to select what part of the house one wants insured, Choices will spawn a number of imitators.

According to Globe's General Manager, Personal Lines Division Peter Levy, Globe is projecting between 300-500 clients in the first year of this new product.

Taking an overview of the general insurance industry in Jamaica, Levy said: "Over the last two years the general insurance industry has not done too well, largely because the motor segment has been suffering heavy losses due to the high number of accidents and the cost of repairs. Despite the state of the industry we at Globe have had two great years, but we are only breaking even with the motor segment.
"I think the industry will have to adjust prices to get the motor market back into shape. The property market is very competitive following Ivan and with the economy contracting and inflation on the rise, people are not making insurance a priority."
Levy further added that Globe has had good underwriting results and manages its businesses pretty well.

"We are in the business to make money. The industry tends to rely on investment income to shore up profits but if you can't make money on your core business then you shouldn't be in the insurance business. As at May 2007, our assets stood at J$4.2 billion with investments including cash exceeding J$3.3 billion," said Arnold.

"Globe in my opinion has the best technical team of underwriters in this market. Our claims team is second to none and insurance professionals, IT and Accounting staff all make us a force in this market," said Levy.

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