Scotiabank Group says its insurance business has survived well during the COVID-19 period so far.

Senior vice-president for Investment and Insurance, Dr Adrian Stokes disclosed that premium lapses have surprisingly been flat so far this year, given the fallout in the economy from the novel coronavirus crisis.

Speaking at a recent Jamaica Observer Business Forum, Dr Stokes reported, “We have not seen any substantial increase in lapses; in fact, our lapses so far are flat year over year, in other words, every day I see this data I ask my team to check if its accurate, we are not seeing any fallout so far.”

However, he cautioned, “It’s still very early in the evolution of the crisis and so things may change but so far we have not seen any material increase in lapses so that’s a very good situation from our perspective.” Dr Stokes, flanked by his president, David Noel, and executive vice-president of Retail Banking, Audrey Tugwell Henry, emphasised that one of the things that the Scotiabank Group did very early in the crisis was to be proactive.

PREMIUM ASSISTANCE

He pointed to the assistance programme put in place for customers, in particular insurance customers, as “the last thing you want to do in a crisis is to lose your insurance protection, especially in a health crisis and so we were proactive with lengthening the grace period that you have to pay your insurance premiums. We move that from 60 to 90 days, which was a significant assistance to our customers”.

Dr Stokes explained that this allowed customers to have more flexibility with insurance payments, pointing out that one of the principles the Sotiabank Group articulated at the beginning of the crisis was that it will preserve and protect its customers.

“Giving them [customers] greater flexibility to pay their premiums was very important to us,” Stokes remarked.

MANAGING COVID-19 EXPOSURE ON SCOTIABANK GROUP

Concerning management of the exposure of COVID-19 on the banking group, Dr Stokes trumpeted that this has been successfully navigated thus far, with very limited exposure.

“We do not have a large exposure on our balance sheet. When you look at our balance sheet across all of our various businesses, we have pristine balance sheets and as a group a very, very solid situation,” were the words uttered by the Scotiabank Group senior vice-president for Investment and Insurance.

He chuckled that Scotiabank Group has no linear risk, “In other words we do not go to our beds worrying about if the exchange rates were to move or we are going to be involved in a serious loss or anything like that we do not have; thankfully, we do not have that kind of exposure on our balance sheets.” Stokes sought to highlight the capital strength of the banking group by declaring, “It’s important to make the point regarding the strength that we brought into this economic shock in terms of our capital levels and overall our liquidity situation.”

He underscored that Scotiabank, which is a very conservative banking group came into COVID-19 fairly well prepared, with healthy capital and liquidity, and being very well capitalised.

FLIGHT TO QUALITY

Dr Stokes was questioned about whether there has been any capital flight from Scotiabank as a result of the COVID-19 crisis. He responded that on the contrary, “what we have seen in some instances, certainly in one of my business the investment company, is a flight to quality, where customers recognise the strength of our organisation”. He said these customers recognise that during severe periods of financial stress, Scotiabank, as a group, is one which bolsters their confidence in the way in which it manages its businesses and thus represents the best value proposition for them.