THE Financial Services Commision (FSC) in its latest report on the insurance segment indicates that life insurers saw an increase in premiums but earnings have fallen off.

The FSC said that for the nine months ended September 2022, aggregare data showed that total revenue dipped by 5.1 per cent to $74.8 billion. Revenues for the same period in the prior year were recorded at $78.8 billion.

The decline was recorded as though net premiums earned (NPE) for the industry increased by 7.6 per cent to $58.6 billion; monies collected for management fees, service charges and other revenue fell by 17.4 per cent to $5.3 billion.

At the same time, the sector saw its aggregate net investment income declining by 38.1 per cent to $11.8 billion in the reporting period. However with taxes for life insurers falling by 8.6 per cent to $54.3 billion, the entities’ cumulative net income before tax rose by 5.7 per cent to reach $20.5 billion at September 2022.

Life dominance

Seventeen registered insurance companies were operational as of September 30, 2022. The six life insurance companies continued their dominance within the insurance sector, accounting for 77 per cent of the sector’s total assets, while the 11 general insurance companies were responsible for the remaining 23 per cent of the asset base at the end of the reporting period.

Aggregate total assets for the life insurance companies declined by $1.1 billion, or 0.3 per cent, to $396.5 billion while the combined liabilities fell by 4.2 per cent to $253.4 billion.

On the general insurance side, the FSC said a growth in receivables from reinsurers, policyholders, brokers and agents drove total assets in that segment of the market up 12.8 per cent to $116.4 billion as at September 30, 2022.

At the same time, the sector’s total liabilities increased by 18.2 per cent to $87.3 billion in September 2022. Contributing factors to the growth in liabilities included unearned premiums and payables to reinsurers. The changes in these receivables and payables are based on the timing of cash inflows and outflows associated with insurance policies and reinsurance arrangements.

For the nine months ended September 2022, the aggregate net premium earned (NPE) by general insurers declined by 8.7 per cent to $14.5 billion. The decline in NPE was primarily due to a 29 per cent increase in reinsurance ceded. Combined net investment income improved by 33 per cent to reach $1.9 billion, due to higher interest rates in 2022.

Other income declined by 67 per cent due to foreign exchange losses as the Jamaica dollar appreciated against the US dollar. Consequently, the general insurers’ total revenue for the reporting period was $16.8 billion — a reduction from the $18.3 billion in the comparative period in 2021.

For the general insurance sector, total expenses before taxes increased by 1.5 per cent to reach $15.8 billion. As a result, net profit before taxes amounted to $1.0 billion.