Key Insurance Company Limited (KEY), incorporated in 1982 as a general insurance company, listed on the Junior Market of the Jamaica Stock Exchange (JSE) in March 2016. In March 2020, Grace Kennedy Group Limited, through its wholly-owned subsidiary acquired 65 percent of the issued share capital of Key Insurance. Thereafter, KEY was promoted to the main market of the Jamaican Stock Exchange.

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KEY has underperformed over the last few years. The company experienced a turnaround in its fortunes, particularly in the fourth quarter of 2020, accruing an underwriting profit of $34.2 million and profit before tax of $88.5 million according to the 2020 Annual Report (KEY 2020 Annual Report).

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The company’s strategic objective is to grow through an expansion of its motor insurance portfolio. They assumed higher risk but it was not adequately underwritten. The higher risk contributed to an increase in claims which resulted in consecutive years of underwriting losses.

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The acquisition of a majority stake by GK Limited is expected to inspire a turnaround of the company’s operations by shoring up its capital reserves facilitating strategic expansion. Given GK’s experience within the industry the company has implemented more robust risk management protocols and more effective corporate governance mechanisms. According to the 2020 Annual Report, in January 2021, the Company successfully raised $668 million through a Rights Issue (KEY Annual Report 2020). GraceKennedy participated in the issue, maintaining its shareholding at 65 percent in KEY, and demonstrating confidence in the future prospects of the Company. It should be noted that for the nine months since GraceKennedy assumed management, the Company recorded profits in excess of $58.4 million.

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KEY experienced marginal growth of 2 percent in gross written premium in 2020 despite the negative impact of COVID-19 on the local economy and businesses. This is in contrast to the 0.2 percent reduction in gross written premium experienced by the Jamaican insurance industry in 2020. During the year under review, the company developed and rolled out two new products that have attracted significant interest from the market, namely the Motor Cycle Insurance Policy and PPV Protect Insurance Policy. Special discounts were also offered on various motor policies in 2020 to ameliorate the adverse financial impact the pandemic had on our customers (KEY Annual Report 2020).

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The company’s stock price closed at 5.96 JMD in 2020, up from a closing price of 3.2 JMD in 2019. Shareholders recorded an earning loss per share for the third consecutive year. With the continued restructuring of KICL’s insurance portfolio and insurance programmes, greater efficiency is expected in the future.

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