Scotia Group Jamaica has announced plans to enter the general insurance market this year.
President and CEO Audrey Tugwell Henry said general insurance as an additional line of business will allow customers to engage with Scotia as a “one stop shop for financial services”.
“Our main reason is that we are a full-fledged financial services producer. We know our customers have general insurance needs, and it’s on that basis that we will enter the market,” Tugwell Henry told Scotia’s annual general meeting on Friday, March 11.
Scotia’s entry into the market is pending regulatory approval from the Financial Services Commission.
Once given the green light, it will compete with other players in the financial services industry, namely NCB Insurance, Advantage General (led by Sagicor), JN General and VM Group.
Indeed, the addition of general insurance will complement Scotia’s mortgage portfolio, which has grown 14% year-over-year.
“We make mortgages for our clients [and] we want to be able to support the process end-to-end by providing general assurance,” noted Tugwell Henry.
Scotia mortgage customers currently use its preferred partner BCIC or another provider of their choice.
For its fourth quarter which just ended in January 2022, the bank’s mortgage loan portfolio performed strongly, registering a 17% increase over the comparative period.
Scotia offers a diverse range of products and services – personal, business and small business banking, wealth management, personal insurance and mortgages.
Its current insurance portfolio includes creditor insurance and life insurance, pension accumulation and payout, offered through its subsidiary Scotia Jamaica Life Insurance.
In its just-released January quarter results, Scotia said the insurance business continued to perform well, with noncreditor premiums up 10% year-over-year and revenue creditors’ premiums increasing by 19% compared to the same period last year.
Scotia Group reported net income of $1.8 billion for the quarter ended January 2022, up $663 or 2% from the same period last year.
Insurance revenue increased by $159.6 million or 25.2% to $793.7 million, reflecting higher transaction volumes from improved sales initiatives crosses associated with higher releases of actuarial reserves and lower reimbursements.
Other income, which includes insurance income, however decreased by 12%.
Meanwhile, net fee and commission income was $1.5 billion and was down $174 million or 10.4%.
The observed reduction in fee and commission revenue is attributable to the continued implementation of Scotia’s digital adoption strategies, which focus on educating customers about our various electronic channels resulting in lower fees associated with rising costs associated to the map network.
Assets increased by $38 billion or 7%, with a capital position of $115.4 billion at the end of the quarter.