Key Insurance Company Limited will be seeking to grow its comprehensive book of motor business to improve the profitability of that segment and capture the growing shift to the new brand of Chinese vehicles.

Two-thirds of Key’s insurance revenue is currently dominated by its motor book of business with third-party policies currently making up two-thirds of the motor book. Third-party policies are a form of liability insurance that covers the costs to restore an external party to their previous state before an event. These policies are cheaper for policyholders, but it doesn’t cover the cost to restore the insured driver’s vehicle where they are liable.

A comprehensive insurance policy covers the cost to restore the insured driver’s vehicle and the other party’s vehicle if the insured is liable for the incident. However, the insurance premium costs more for the policyholder than a third-party policy.

In Key’s case, increased claims costs along with more frequent and severe accidents have cut into the earnings it can generate from its motor book of business. The motor segment saw insurance revenue grow by 17 per cent in 2024 to $2 billion, but a 22 per cent spike in insurance service expenses to $1.93 billion left it nursing a negative insurance service result of $50.51 million. Key’s gross written premiums in 2024 for its motor book of business was $2.12 billion.

“Instead of segmenting and saying we’re not going to write motorists above a certain sum insured value, we’ve changed that outlook because we’ve seen the importance of it. We’ve done our analysis and know that our loss ratios for the higher valued vehicles are pretty low. In any event, what we’re seeing in the motor vehicle space is that the newer vehicles are coming above what used to be our threshold,” said Key General Manager Tammara Glaves-Hucey in a Monday interview.

The loss ratio is an insurance term which refers to the amount of premiums paid out as claims and related expenses. Key’s loss ratio moved from 60.41 in 2023 to 60.21 in 2024 which meant that Key paid out $0.60 in claims for every $1 in premiums it collected.

With the aim to get a positive insurance service result, Key is designing new products around different markets to bolster that book of comprehensive book of business. It is currently piloting a new product called Key Secure at its offices. Key Secure is geared towards sports utility vehicle drivers and small pickup vehicles for private use. This is in addition to its push for the growing Chinese brand of vehicles such as Jetour, Changan, GWM and BAIC.

“So, you have the BYD’s and new vehicles and new brands. So, we want to play in that space, and we believe that will help us. So, we are designing products specifically targeting comprehensive business and moving away from our traditional target of third-party businesses,” the Key GM noted on the new strategy.

She also added, “We want to report a positive insurance result. So, what we’re seeing is in order for us to move from where we are to a much more positive result, then we need to look at how we can grow our comprehensive book of business.”

The new products are also being supported by the company’s technology investments and innovations for its customer base. Key introduced an enhanced website during 2024 as part of its suite of changes. This also included a travel insurance platform and improvements to its online portal for handling transactions. The company has even introduced a digital branch which is aimed at supporting the transition of clients to its online platform. That digital branch already accounts for eight per cent of gross written premiums despite being launched earlier in 2025.

Despite these technology initiatives, Glaves-Hucey admitted that clients still prefer to visit their locations to notify the company of a claim. She noted that while there is comfort paying premiums online, the company probably gets two or three online notifications per month.

“When it comes to notifying us of a claim, customers want to come in and to see and talk to someone face to face versus doing it on the platform. Whilst we ensure that we have all different modes of communication open and distribution channels, we also have to respect the one that is selected and mostly used by our customers,” she added.

Key’s overall insurance revenue improved 22 per cent to $3.06 billion in 2024, but reported a reported a negative insurance result of $19.03 million due to higher claims. The company’s investment income of $229.31 million helped to push Key’s bottom line up by 61 per cent to $66.95 million despite higher operating expenses.

Key’s first quarter report showed its insurance revenue rising by 15 per cent to $801.73 million, but the insurance service result was negative $11.22 million. An increase in other operating income with flat expenses resulted in net profit rising 26 per cent to $12.48 million.

Key’s asset base grew five per cent during the quarter to $4.83 billion with $2.54 billion in investment securities and $548.09 million in cash. Total liabilities and shareholder’s equity was $3.39 billion and $1.44 billion, respectively.

Key’s stock last traded at $2.52 on Thursday, which is slightly below the $2.70 takeover price being offered by GraceKennedy Financial Group Limited (GKFG). GKFG’s takeover bid is set to close on July 11 after two extensions. GKFG is seeking to acquire the remaining 149.5 million shares or 26.7 per cent of Key Insurance for $403.71 million.

Steven Whittingham, deputy CEO of GKFG, told investors at the GraceKennedy’s May 28 annual general meeting that GKFG had already surpassed the 80 per cent threshold based on submitted offers. The 80 per cent threshold is the limit set by the Jamaica Stock Exchange (JSE), which requires at least 100 shareholders to own 20 per cent of a company to remain listed. Thus, Key Insurance company is set to be delisted from the JSE after the takeover bid is completed.

Kerry-Ann Heavens McGill, Key’s company secretary, explained to investors at Key’s June 25 AGM that one of two scenarios would take place when Key is delisted. If GKFG meets the “squeeze-out” stipulation under the Companies Act, it would allow for it to make a compulsory acquisition of the remaining shares of Key from the remaining shareholders at the same $2.70 price. However, if GKFG doesn’t meet that provision of the Companies Act, Key’s remaining shareholders would own shares in a private company with no secondary market and would incur extra costs to transfer their shares.

Key Insurance’s delisting would leave General Accident Insurance Company Jamaica Limited and IronRock Insurance Company Limited as the two remaining general insurance companies on the JSE. Also, this would be the second ordinary shares delisting after tTech Limited on February 28 following the acquisition by Simply Secure Limited.