Credit Union-Owned Insurance Broker Seeks To Leverage Relationship
The insurance brokerage owned by Jamaica's credit unions has rebranded itself and says that it is now aggressively canvassing its parent entities for new business to drive growth and profit.
"We are positioning ourselves to be the insurance provider to the co-operative movement in Jamaican," said Barrington Whyte, the chairman of Jamaica Co-operatives Insurance Agency (JCIA).
"We were recently successful in raising nearly $30 million in equity from credit unions to begin the transformation," Whyte said.
Until last year, JCIA was NUCS-CIS, an agency that brokered business across the market, but without any real focus on garnering business from a natural constituency, its owners.
Yet, combined, credit unions in Jamaica have a loan portfolio of $37 billion of which around 70 per cent, or $25 billion, is covered by insurable collateral such as motor vehicles and real estate.
But JCIA placed relatively little of that business; no more than 10 per cent.
However, after a strategic review in late 2009, JCIA decided that it could get more of the 'house' business and moved to expand its capital by asking co-ops to subscribe the additional equity.
It bought new software to better enhance its information management capabilities and set up insurance service centres in several credit union branches.
At the end of last year, JCIA had capital of just over $58 million and total assets of $82 million.
"This result in a capital-to-asset ratio of 70.7 per cent, making JCIA on of the highest capitalised institution of its kind in Jamaica," said Whyte.
Now, he hopes to leverage this relative strength to grab new business, up to doubling its share of the insurance written through credit unions. Last year, JCIA wrote $160 million of new business.
"We believe we have more than 10 per cent of the market for the insurance of credit union collateral," Whyte said. "We aim to increase this significantly. In 2011, we project a revenue growth of 20 per cent."
