After its regional expansion plans were grounded to a halt because of the pandemic, Caribbean Assurance Brokers Limited (CAB) has ramped up its spending on technology as it looks to improve its growth profile.

The local insurance broker spent $36.77 million on its capital in the first half of 2023 as it readies itself to launch a new platform by the end of the year. This will also facilitate the preparation for the Data Protection Act which gets into full swing by December 1.

“The reality is that a lot of our business is in the area of health insurance. So, person’s personal information is critical. So, one of the investments we had to do in terms of our initiatives overseas also included investment to ensure that we can secure a person’s personal information. That is very expensive and so, that is one of the major costs in that area,” said executive chairman and majority shareholder Raymond Walker at the company’s annual general meeting last Friday at the Jamaica Pegasus hotel in St Andrew.

As an insurance and facultative placement broker, CAB acts on the behalf of local persons by placing their insurance business with local insurers or overseas insurers in the areas of international insurance, employee benefits, general insurance and individual life insurance.

The company’s new platform and spend was in the initial region of US$200,000 when it began this plan nearly three years ago. While Walker didn’t delve into the current cost, he highlighted that the new platform would be more market-driven, improve the company’s growth profile and protect customer data.

CAB was looking at Caribbean territories such as Trinidad & Tobago, Barbados and Guyana for its planned expansion. While the company wouldn’t need to setup physical offices in some markets due to technology, the insurance broker is gauging the appetite in different spaces to evaluate the opportunities that exist.

“E-commerce is a significant part of our initiatives in the area of technology. That is actually coming very soon, and our IT manager is right here, who will confirm that the system should be up and running before the end of this year. You can online and get your quotes, pay your premium, query certain things and so on,” Walker responded on the new platform coming in short order.

CAB’s former Chief Executive Officer Tania Waldron-Gooden departed at the end of April as she took on the executive role at Chicken Mistress Limited, which trades as Island Grill. However, Walker confirmed that the process has been completed after narrowing down, from 30 applicants, six in a second round and three in the final round. While the Jamaican CEO has not been officially confirmed as yet, Walker highlighted that the leader will have a tall task to grow the business. CAB generated $505.90 million in revenue and $77.99 million in net profit for 2022.

“One of the first things we point out to any potential CEO is that they have to put a plan in place to ensure they have a minimum growth over the previous year of 20 per cent. We have completed the process. I should note that process was driven by the consultancy arm of BDO. We have selected the person, but I’m not in a position to disclose the name of that person at this point in time because the person has not yet signed the letter. There’s a period in which the person has to sign that [letter],” Walker added.

CAB is looking to continue its product and services diversification and increase its revenues as it readies itself for the second half of 2023. It will also be looking to improve its risk management and compliance framework.

CAB’s second quarter revenue climbed 11 per cent to $101.31 million, which was largely attributable to the 52 per cent growth in the international insurance division. However, higher operating and financing costs pulled its net profit down 61 per cent from $2.64 million to $1.04 million.

Despite the mixed Q2 performance, the company’s six-month revenue was up 10 per cent to $215.29 million with net profit rising 306 per cent from $4.45 million to $18.07 million. Earnings per share rose from $0.02 to $0.07.

CAB’s total assets grew 11 per cent year over year to $844.16 million with cash closing the period at $255.05 million. Total liabilities marginally declined to $362.92 million with the company set to pay off one loan by January. Shareholders equity increased 24 per cent to $481.23 million.

CAB’s share price moved up 13 per cent on Tuesday to $2.89, which leaves it up 54 per cent year to date and gives it a market capitalisation of $758.63 million. CAB shareholders are set to be paid $0.0267 or $7 million on October 26 to shareholders on record as of September 15.