Microinsurance to boost GK General Insurance’s revenue

Microinsurance to boost GK General Insurance’s revenue

Don Wehby reckons that microinsurance will grow to 20 per cent of Grace Kennedy General Insurance Company (GK General Insurance) revenue over time.

The CEO of GraceKennedy figures that the US$40 million premium income for the insurance subsidiary stands to benefit from the large number of uninsured persons who can access the lower insurance premiums under the three main products — Bill Protect, GKAmed, and Livelihood Protection Policy (LLP).

Making payments to Jamaica Public Service and National Water Commission through Bill Express provide customers with insurance coverage for future bills, should they become disabled in a way that interferes with their job functions and are unable to pay.

LPP provides coverage for loss of income due to weather events — the lack of which has been a major complaint of farmers for years — while GKAmed covers doctor’s appointments and special tests, such as X-rays, for as little as $500 a month.

What’s more, GK General Insurance plans to launch an insurance product that covers cell phones by year end.

But it will take a lot of education and market awareness for the new concept to take off, said Wehby, given that only a quarter of Jamaica’s 2.5 million adults are properly insured.

Bill Protect is expecte to be taken up by about 500,000 customers, within a year, while GKAmed should sign 10,000 clients over the next 12 months with a customer base projected to grow by 20 per cent each year, according to Elizabeth Chung, manager, customer experience and innovations at GK General Insurance.

LPP is expected to be taken up by 300 customers in St Thomas and Portland, where the insurance offering is being piloted.

All of the 250,000 accounts to which payments are made can benefit, he said.

The insurance product, which allows customers to recover more quickly after a perilous weather event is being offered through GK General Insurance in association partnership with select local credit unions and the People’s Cooperative Bank.

It’s biggest selling point is that the product is parametric — individual payouts are tied to a series of thresholds for wind speed and rainfall in a given weather event. If one of the thresholds is met, the client’s policy is triggered and will receive an automatic payout to his bank account.

The programme was developed by the Munich Climate Insurance Initiative (MCCI) in partnership with the Caribbean Catastrophe Risk Insurance Facility (CCRIF); microinsurance broker, MircoEnsure and international reinsurer Munich Re. MIIC was started in response to the realisation that insurance solutions can play a role in adaptation to climate change.

Surveys for demand of LPP in Jamaica showed 48.1 per cent of individuals indicating that they didn’t repair or replace their damaged assets, 51.9 per cent waited for help from the Government, 65.4 used up their savings and 16.3 per cent borrowed money to recover following a disaster, according to Sobiah Becker, project manager at MCCI. Over 13,000 households in five islands, including Jamaica participated in the study.

Investment in the overall project is about $20 million and the company has partnered with a South African company, Hollard Insurance Group, which will act as the underwriter for two of the products, according to the GraceKennedy CEO.

He said that through its branch network, which includes 140 remittance and Bill Express locations, there is an ideal distribution vehicle to reach Jamaicans with microinsurance, said Wehby.

Published in the Jamaica Observer