Sabrina Gordon, Business Reporter, Gleaner
Jamaica National Building Society (JNBS) says its new life insurance company will open for business in the second half of the year.
The financial services group was granted a licence by the Financial Services Commission (FSC) back in August.
“Our next step now is to try and operationalise the company,” said Earl Jarrett, general manager of JN.
The group is already a player in the general insurance market through subsidiary NEM Jamaica.
JNBS disclosed back in 2010 that it would be entering the life market and was confident of gaining the FSC’s approval. The company is also going after a commercial banking licence but was not as sanguine about the central bank’s response.
Jarrett said last Thursday that JNBS would continue to push for approval of the banking licence application, which is still before the Bank of Jamaica.
The life insurance subsidiary will begin offering products to the market in the latter half of the year. It enters a market in which the top-two players in a market of five life insurers are valued at a combined J$26 billion in net premium income in 2010. The data for 2011 is yet to be published.
Sagicor dominates with net premium income of J$16 billion, while competitor Guardian Life earned J$7 billion. The other players are Scotia Jamaica Life Insurance Company and NCB Insurance Company.
“I know we have major competitors on the ground but we have a large membership base, client experience. People trust the JNBS brand because over time, we have demonstrated our commitment to them, so our experience puts us in a position to be a meaningful competitor,” said Jarrett.
Jarrett was reluctant to disclose much detail about the new company but said its name would be “closely aligned to the JN brand”.
Still, the FSC confirms that approval was granted to JN Life Insurance Company Limited, which has been registered with the regulator since August 1, 2011.
The location of its operations is to be determined.
“We are looking at a couple of choices. We are not yet ready to speak to it but it will be in Kingston,” he said.
Jarrett was also tight-lipped on the amount of money to be invested in the company.
“I don’t want to mention that; it’s still a work in progress,” he said.
Under the Insurance Act 2001, to register a life insurance company, the applicant must have a minimum paid-up and unencumbered capital, surplus, reserve or equivalent fund of J$150 million if it intends to do life and/or sickness and health insurance business.
In the case of a general insurance business, the minimum capital required is J$90 million.
This move now by JN to set up a life insurance company represents a further diversification of the group’s offerings. Its main business is mortgage lending, but it also operates in the money services market, as well as finance and fund management, general insurance, and the information technology sectors.
JNBS businesses also operate in the overseas markets of The Cayman Islands, the United Kingdom, Canada, and the United States.
Jarrett says the group’s next move regarding the life company is to have actuaries look at various projections and estimates of insurance hardware, determine the organisational structures, and start identifying recruits to fill jobs.