Significant investments in people and systems have pushed Caribbean Assurance Brokers Limited (CAB) into the red, with the company reporting a net loss of $98.5 million for the financial year ended December 31, 2024. This marks a sharp reversal from the $123.5 million in profit posted for the previous year.

Founder and Chairman Raymond Walker, in the company’s recently published annual report, told shareholders that this shift in the financial performance reflects a combination of increased operational costs and long-term sustainable growth and development.

“Regrettably, the return on investments in capacity building is not typically realised immediately, as can be observed from the financial results for 2024, especially when compared to 2023. Obviously, this capacity-building initiative, that we embarked on towards the end of 2023, had an enormous price tag outside the customary administrative and capital expenses for 2024,” he said.

The company, following a massive capacity-building initiative started in late 2023, sought to develop a robust technology based infrastructure. One designed to create a digital paperless environment, with the practical reality of e-commerce to power the transaction of business throughout the region without having to establish physical locations. Another element of the capacity-building exercise also saw the recruitment of several highly productive managers, supervisors and producers from some of the leading life and general insurance companies and insurance brokers in Jamaica.

“Some of these individuals form the nucleus of our new and innovative management team, some of whom have been responsible for the recruitment, training and supervision of a cadre of over 25 young, bright, productive, and socially mobile producers, across most divisions within the company,” Walker added.

As the focus with respect to human resource development was centred on manpower growth backed by targeted recruitment, efficient training and effective supervision, revenue for the Junior Market listed company also marginally dipped to total $538 million —4.3 million below that of the previous year.

During the year, the company also expanded and reconfigured its physical offices at the Courtleigh Corporate Centre in New Kingston to accommodate the growing team.

According to CEO Sharaley Bridgeman, total operating expenses for the year totalled $631 million, reflecting an increase of $217.5 million or 52 per cent above that in 2023.

“This increase was primarily driven by higher staff costs, professional fees, repairs and maintenance, registration fees, related to licensing and regulatory requirements and advertising expenses. These increased costs were part of our planned strategic transformation aimed at positioning the company for long-term growth, operational resilience and improved performance in the years ahead,” she explained.

In an outlook the CEO further said the company remains confident that its strategic moves in 2024 have laid a solid foundation. In 2025, execution and client engagement, she said, will become the heart of the strategy. Among upcoming initiatives to be rolled out are educational campaigns and bespoke digital solutions such as chatbot services, e-commerce platforms and enhanced online experiences — all designed to drive customer interaction, accessibility and innovation.

The chairman, not happy about the losses, said they, however, came as no surprise.

We had earmarked a significant percentage of our profits in 2023 to build a solid foundation by recruiting and developing quality human resource and constructing the most robust technology infrastructure to ensure that CAB becomes and remains the envy of the entire insurance industry not just here in Jamaica but throughout the wider English-speaking Caribbean,” he noted.

Despite the 2024 setback, CAB says it is already seeing early signs of improvement. For the first quarter of 2025, operating expenses dropped to $126.11 million, 12 per cent or $17.4 million below that of the comparable period in 2024.

“This is a direct result of the improvement in efficiencies associated with the implementation of certain technology related saving initiatives. I have no doubt that it will not be long before all shareholders and customers of CAB will again begin to reap the rewards,” Walker concluded.