Key Insurer wants to expand its travel insurance business to offset rising costs linked to its core auto division.
This year, the company launched a travel insurance portal on its website ahead of the Summer Olympics in France in July and August.
“We encourage everyone going to France for the Olympics to purchase travel insurance,” Key general manager Tamara Graves-Huessy said at the company's annual general meeting on Wednesday.
About 15 million to 19 million tourists from around the world are expected to visit France during the Olympics, but it is unclear how many Jamaicans will take part in the games.
Key currently derives two-thirds of its revenue from auto insurance. Grubbs-Hughesy said the general insurance company's main customers are low- and middle-income people who are looking for third-party insurance when they buy a first car. He cited BCIC as its main competitor.
Key offers travel coverage on its portal including up to $2,000 for lost luggage, $1,500 for trip cancellation, $150,000 for medical cover and $50,000 for accidental death. Securing coverage for a European trip for a 40-year-old would cost about $14,000 in Jamaican currency, rising to $20,000 if you have children. The initiative marks the diversification of Key's insurance portfolio.
Key Insurance posted a profit of $9.9 million on sales of $700 million in the fiscal year ending March 2024, up from a profit of $3.5 million on sales of $585 million a year ago. However, the company's core insurance services business lost $8.3 million in the quarter. However, the result was an improvement over the $20 million loss in insurance services posted in the fiscal year ending March 2023.
The loss was offset by investment income of $52 million in the fiscal year ending March 2024 and $44 million a year earlier.
“We are focused on growing revenue across all our business segments,” Grubbs-Hughesy said, adding that “auto insurance remains our top priority.”
Grubbs-Hughesy acknowledges challenges related to global inflation, declining consumer purchasing power, and rising reinsurance costs, which have increased by approximately 15%. Additionally, automobile accidents continue to rise, with more than half of Key's auto insurers experiencing claims. Because Key's primary target market is first-time car buyers, customers typically have limited insurance policy history. This demographic is leading to an increase in the number of claims and associated costs.
“We're working to improve our underwriting capabilities, and we're spending a lot of time with our team members to make sure we're making the right underwriting decisions,” Grubbs-Hughesy said. “We can't control everything, but it will improve the overall experience for our customers as well as our team members.”
So far this year, 195 people have died in crashes. On average, there are 5,500 motor vehicle crashes per year resulting in more than 13,000 people being treated in hospitals, according to the Jamaica Economic and Social Survey Annual Report published by the Planning Institute of Jamaica. Motor vehicle crashes are the largest category of hospital emergency room visits, highlighting the severity of the problem.
“The life you save could be your own,” Grubbs-Hughesy said, repeating the tagline of a car safety campaign that encourages safer driving.
Additionally, Key Insurance is hoping that no storms will hit Jamaica despite forecasts of an active hurricane season. “Preliminary reports indicate that it should be an active hurricane season. We are insuring for this season,” she said.
She spoke on Wednesday as Saharan dust moved across Jamaica, accompanied by strong winds and subsequent rain.
“We don't know what's going on outside,” Graves-Huessy told the company's shareholders, referring to the extreme weather, “but whatever happens, we are ready to serve all of our customers and we're praying for the best.”
Key Insurance is majority owned by the GraceKennedy conglomerate and is a member of GK Financial Group.
steven.jackson@gleanerjm.com
