RATING DRIVERS
Supporting Factors
- Long established player with strong brand equity and good market position
- Good capital adequacy supported by low risk retention and strong network of reinsurers
- Moderately diverse investment portfolio with good returns and good liquidity, notwithstanding the impact of COVID-19
- History of profitable operations
- Strong Enterprise Risk Management (ERM) framework
Constraining Factor
- Sluggish economic conditions could constrain growth
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the Ratings and/or Outlook include:
- An improvement in the credit rating of the Government of Jamaica
- Sustained growth in PAT by >15% over the next 2 years without adversely impacting capital adequacy and asset quality
Factors that could, individually or collectively, lead to a lowering of the Ratings and/or Outlook include:
- A lowering of the credit rating of the Government of Jamaica
- A 2-notch deterioration of the credit rating of any of GENAC’s top 4 reinsurers by A.M. Best or Standard and Poor’s Ratings Services
- Loss of relationship with any of the Company’s major reinsurers
- A deterioration in the Company’s Minimum Capital Test Ratio below 175% sustained for 6 months
- A 10% fall in gross premium income for 2 consecutive years
COMPANY BACKGROUND
General Accident, located in Kingston, Jamaica, commenced operations in the 1920s, as agents for global insurer General Accident Fire and Life Assurance Corporation Limited (GAFLAC), headquartered in Perth, Scotland. In 1981, the majority shareholding[1] of GAFLAC’s agency’s operations was acquired by Musson (Jamaica) Limited (the Musson Group)[2], after which it was renamed and incorporated as General Accident Insurance Company Jamaica Limited (GENAC or the Company) and became a wholly owned subsidiary of the Musson Group. In 2011, 20% of GENAC’s shares were listed on the Jamaica stock exchange. With the exception of the Musson Group, the 2 largest shareholders as at September 2021 were Mayberry Jamaica Equities Limited and QWI Investments Limited, holding around 3.36% of the aggregate shareholdings of GENAC.
In September 2019, the GENAC Group acquired 55% of the share capital of Motor One Insurance Company Limited in Trinidad and Tobago (T&T) (Motor One) and subsequently raised its shareholding to 65% in June 2020. In October 2020, Motor One was formally renamed General Accident Insurance Company (Trinidad) Limited (GENACTT). In 2019, the Company also incorporated General Accident Insurance Company (Barbados) Limited (GENACBB), a subsidiary of GENAC, and commenced operations in May 2020. GENAC offers a range of general insurance products including motor, property, travel, engineering, bonds, public liability and marine cargo.
As at September 2021, the Company reported total assets of J $9.1 billion and over the last 5 years (2016-2020), its revenue and profit after tax averaged J $8.7 billion and J $346.4 million respectively.
[1] The minority shareholder was General Accident, Perth.
[2] The Musson Group is a manufacturing and merchandising group incorporated and domiciled in Jamaica.
Analytical Contacts:
Megan Dass
Tel: 1-868-627-8879 Ext. 239
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 244
Cell: 1-868-487-8356
E-mail: [email protected]
Website: www.caricris.com
E-mail: [email protected]
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