Following the passage of recent natural disasters, IronRock insurance has said it expects no major claims from its catastrophe/peril insurance product.

“An earthquake of magnitude 5.4, according to the United States Geological Survey, affected Jamaica on October 30, 2023 at 10:57 am. We do not expect to incur significant claims from this earthquake,” Managing Director Evan Thwaites said in an interim report to shareholders.

“It’s a relatively minor earthquake in the grand scheme of things, and one wouldn’t expect much damage to incur to insured properties at that level of intensity,” he further said in an interview with the Jamaica Observer on Monday.

He said that even while the insurance industry in the coming years expects that there could be heightened impacts and more disasters as a result of adverse climate change patterns, how it is likely to affect players in the sector remains to be seen.

Thwaites, in commenting on the likely impact from the weekend rains which caused significant damage to some parts of the island as a result tropical cyclone 22, said that while there may be some amount of claims, these too are not expected to be significant.

“It’s too early to say, the rains happened for the most part on Friday and Saturday and it’s only Monday today, so nobody really knows as yet the extent of the damage or what the claims will be like. But generally speaking, it would take more serious flooding to cause a significant amount of claims, so we, therefore, don’t expect a lot of claims from it,” he told the Business Observer.

IronRock, through its property insurance portfolio provides financial protection against disasters for homes and other structures, covers for loss or damage to building and/or their contents, insuring against perils such as fire, lightning, natural disasters (including earthquakes and hurricanes), burst or overflowing pipes/appliances, riot and strike, malicious damage, and theft.

The seven-year-old company, whose property portfolio now accounts for more than half of its total gross premiums, has, despite the dramatic increase in property rates caused by the reduced availability of catastrophe reinsurance capacity, said it currently enjoys adequate capacity resulting in commendable revenues from this segment.

“As mentioned in our previous reports, our other classes are all recording good growth, led by our marine cargo portfolio. Claims have been moderate; however, operating expenses are being adversely affected by inflation and additional costs related to the adoption of IFRS 17,” Thwaites also said in the recent report to shareholders.

Its cargo insurance policy, which the managing director said has grown some 15 per cent year on year, protects shipments from loss, damage, or theft while in transit.

At the end of the third quarter period ended September, IronRock’s insurance revenues increased some 49 per cent to total $380.4 million and $1.01 billion at the end of the nine months.

“Our insurance service result has improved to $27.7 million and compares favourably with the result in the prior year of $10.6 million. The improvement is due primarily to increased revenue and moderate claims,” the report noted.

“Investment and other income of $70.6 million and other operating expenses of $87.6 million grew by 26 per cent and 12 per cent, respectively, when compared to the prior year,” it further added, while noting net profits of $14.4 million for the quarter and $10.7 million for the nine-month period.

Total assets, up 19 per cent for the period, also climbed to $1.27 billion, while shareholders’ equity grew to $640.6 million.

Thwaites, in referring to the less-than-desired results from its pay-as-you-drive telematics insurance product, brought to market in 2021, said the portfolio since launch has not grown much.

“The portfolio is very small, it did not take off as we expected, but we have a few policies which we maintain,” he said, sharing a blunt outlook, and noted that in light of IronRock’s current business, he expects to see no material changes in the last quarter’s performance, given no major surprise takes place.