Key Embarks on Cost-Cutting Initiatives

October 23, 2019

“The past year was challenging but one in which we experienced exceptional growth,” stated by Chairman, Mrs. Natalia Gobin-Gunter, at the 3rd Annual General Meeting of Key Insurance Company Limited (KEY). She added that despite the increase in growth there was a sharp rise in the company’s claim experience. Consequently, management responded with an in-depth strategic review of all operations. Furthermore, a more conservative and risk based approach to underwriting screening process was adopted in 2019. The goal is to reduce the claims experience to result in a more profitable organization.

Mrs. Miles Masterton, Managing Director, highlighted that in order to reverse the negative loss trajectory, the company embarked on a number of initiatives for the FY2018:-

  • Change in risk appetite and preferred business classes
  • Underwriting Department was reorganized and restructured
  • Risk Management Framework

Mrs. Miles Masterton listed some of the actions taken in FY2018 to stem the losses from higher risk individuals as:

  1. Reduced limits of liability
  2. Limited coverage
  3. Increased deductibles
  4. Increased premiums
  5. New business written in the October to December period over the prior year reduced by 20%

The managing director also highlighted the following initiatives throughout FY2018:

  1. Risk management unit was established
  2. Proactive monitoring of Risk
  3. Assessment of the Company’s Risk premium profile shift for correction
  4. Overhaul of Systems Department
  5. Investment in technology to improve service and aid with growth and efficiency agenda
  6. Using technology to deliver our products to a wider cross section of clients
  7. Easy renewal online

Mrs. Masterton also noted that the company made traction in the Non-Motor Segment of the Business:

  • Increase in non-motor business
  • Travel insurance
  • Group personal accident and personal accident insurance for individuals
  • Renter’s and homeowners contents insurance
  • Cyber liability insurance

Mrs. Sandra Masterton noted, “We are confident that with various measures in line with our turn around plan, we will stem the negative trajectory and restore the company to profitability.”

Lastly, Finance Director, Jacqueline Johnson, she reported on the financial performance of the Company for the year ended December 31, 2018. She highlighted the Company boasted growth in gross premium of $1.8 billion from $1.4 billion, marking the third successive year in which the Company recorded revenues in excess of one billion dollars. Claims expense for the period increased significantly to $$1.1 billion from $334.1 million  the year before. This translated to the Company experiencing a net loss of $162.66 million compared to $42.66million reported a year earlier.

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein