General Accident Insurance Company Jamaica Limited (Genac) will become the fourth company to graduate from the Junior Market to the Main Market of the Jamaica Stock Exchange (JSE) on September 27.

Genac listed on the Junior Market on September 30, 2011, after raising $416.63 million and became the 12th listed company on the newly minted market. The company has since grown its balance sheet from $3.54 billion in 2011 to a consolidated amount of $12.65 billion at the end of 2022. This was also accompanied by a rise in shareholder equity from $1.14 billion to $2.89 billion over the period.

“Since being listed on the Junior Market over 10 years ago, the company has grown its gross written premium almost seven-fold. In addition to its market leadership in Jamaica, the company has established a regional presence in Barbados and Trinidad. The directors of General Accident believe the successful application reflects its growth, increasing scope and ability to comply with the applicable governance standards for companies listed on the Main Market,” the Genac release stated.

Genac is the second company chaired by Paul B Scott to have graduated to the Main Market following Eppley Limited which was the first company to graduate in December 2018. It is also the second general insurance company to move to the Main Market following Key Insurance Company Limited which graduated in April 2020. However, Key’s graduation came as a result of it becoming a subsidiary of GraceKennedy Limited (GK) which was already listed on the Main Market and impacted its ability to remain on the Junior Market.

Companies listed on the Junior Market are afforded a 10-year tax break, where in the first five years, the firm does not pay income tax (100 per cent remission) while they pay 50 per cent of the income tax in the second five-year period after listing. Genac’s tax remission ended in September 2021 with its tax rate as a regulated company at 33 1/3 per cent.

Caribbean Flavours and Fragrances Limited and Medical Disposables and Supplies Limited are set to see their 50 per cent tax remission end on October 14 and December 24. Fontana’s 100 per cent tax remission is set to end on January 8 with the company to benefit from the 50 per cent remission for five years. There have been 52 companies listed on the Junior Market since October 2009 with Genac’s graduation to leave 47 listed companies on that market. iCreate is currently suspended from trading.

Genac’s graduation will see its annual listing fee move from $1.60 million to $3.20 million and it being subject to fines which currently do not apply to Junior Market companies for breaching JSE rules. Genac’s 2022 annual report and first quarter report were late earlier this year.

One of the benefits that come with moving to the Main Market is that companies are no longer constrained to the $500 million share capital limit which precludes Junior Market firms from raising additional equity capital in many instances. Surpassing this limit would require the company to request permission from the JSE to stay on the Junior Market and pay Main Market listing fees or elect to graduate to the Main Market. Genac’s share capital currently stands at $470.36 million and is 80 per cent owned by Musson (Jamaica) Limited.

Key Insurance had a rights issue in January 2021 where it raised $668.02 million in fresh equity capital to recapitalise the insurance business. This also saw GK increase its stake from 65 per cent to 73.24 per cent.

FosRich Company Limited just completed its non-renounceable rights issue recently where it was seeking to raise $139.32 million in fresh equity and carry it to the maximum allowed issued share capital limit. FosRich’s rights issue closed on August 18 with the newly issued shares yet to be registered as stock units.

For the first six months of 2023, Genac’s insurance revenue rose 36 per cent to $5.26 billion with the consolidated net profit increasing 504 per cent to $246.33 million. Net profit attributable to shareholders jumped from $74.53 million to $224.61 million over the same period. The report for the current period was done under IFRS (International Financial Reporting Standards) 17 which came into effect on January 1 as a changeover from IFRS 4. As a result, the 2022 financials have been restated for comparative purposes.

Total assets grew nine per cent to $9.42 billion with cash and investment securities at $841.70 million and $3.07 billion, respectively. Total liabilities increased five per cent to $6.01 billion while equity attributable to shareholders improved 16 per cent to $3.12 billion.

Genac’s last publicly available minimum capital test (MCT) ratio was 209.1 per cent for 2021 when the FSC requirement was 200 per cent. The MCT ratio has since been reduced to 150 per cent, but there is no available information on the metric with the company only noting in its second quarter report that it was in compliance with the FSC requirements in Jamaica, Barbados and Trinidad & Tobago.

Genac’s share price closed Monday at $4.90 which left it up 11 per cent year to date with a market capitalisation of $5.05 billion. Genac listed at $2.02 in 2011 but has paid out a cumulative amount of $1.94 since listing as dividends to shareholders. Genac’s stock peaked at $9 on October 24, 2019.

Genac shareholders are set to meet this Friday for the company’s annual general meeting at 58 Half-Way-Tree Road to discuss the company’s financial affairs. Shareholders will also be able to ask about the possibility of a potential capital raise following the company’s future graduation.