No plan for merger
Key Insurance focused on recovery, says WehbySunday, October 25, 2020
BY KELLARAY MILES
DON We hby last Thursday told Key Insurance shareholders that there is no plan, at this time, to merge the company with GraceKennedy General Insurance (GKGI).
Wehby, the group chief executive officer of GraceKennedy Group (GKG), said there are obviously some synergistic values to both companies working together to be more efficient. As such, he has “mandated the management to see how best we can improve efficiency ratios by working closely with GKGI in that regard”.
Wehby, who is also chairman for Key Insurance, made the disclosure while responding to questions at Key Insurance's annual general (AGM). The AGM was held following an order by the Supreme Court the day before which granted the company permission to conduct its meetings virtually or in hybrid form over the next year due to the Disaster Risk Management Act containment measures enforced by the Government to stop the spread of novel coronavirus (COVID-19).
Since acquiring 65 per cent of Key Insurance in March, GKGI has been working overtime to reverse the misfortunes of the company which has seen only one year of profits since listing on the junior market of the Jamaica Stock Exchange (JSE) in 2016.
Wehby said that based on the strength of the Key brand in the local landscape, along with its specialised insurance products and growth potential, the plan was to significantly turn around the loss-making company, which has been plagued with a series of losses over the last two years. This, he said, would be done through combined strategic and operational changes aimed at driving rehabilitation of the company's corporate profile and capital structure.
He further said that in alignment with the group's strategic outlook the plan was to take Key Insurance to new markets, as building out a larger market share [which currently is about three to four per cent], was also one of the main strategic outcomes.
“Key Insurance, once we get Jamaica right and start to see the positive signs of growth and proper returns on investment, I would expect that Key would be looking at opportunities in the English-speaking Caribbean for growth.
“Let us get Jamaica right, let us build that balance sheet and make some profits and then we can look outside — I would say that's a medium-term strategy for Key,” he stated.
Following GK's takeover of the company and Key's migration to the main market of the JSE, Key's stock price has risen by 168 per cent and some 330 new shareholders were added. In its second-quarter performance there were also slight improvements which saw losses reduced to $25.4 million when compared to the $144.5 million seen last year.
General Manager Tammara Glaves-Hucey also expressed hope in the company's ability to reinvent and become a leader in the insurance business.
Outlining the company's plan for the way forward, she cited a raft of measures including the projection for annual gross premiums to grow to $2.7 billion by 2025, operational efficiencies driven by digitisation and the use of technology, synergy creation with related companies, and continuous review of its reinsurance programme as some of the main areas to gain focus.
“In our segmentation we have looked at our motor offering and we're every serious about growing in the third party and the PPV segment of the market. On the property side we are also very deliberate about growing in terms of the home owners' and renters' policy. We want to grow the business, we want to increase our market share, and we also want to meet some of the unmet needs of the Jamaican people,” Glaves-Hucey said, noting the availability of capital as the greatest impediment to achieving the company's strategic objectives.
At the meeting, a resolution was approved by shareholders for the company to undertake a renounceable rights issue to raise much-needed capital.
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