Thu | Aug 22, 2019

General Accident profits from promotions

Published:Friday | May 24, 2019 | 12:18 AM
Sharon Donaldson, managing director, General Accident Insurance Company.

Last year, General Accident decided to let its hair down with a new promotional campaign, and the general insurer is still reaping gains from it.

The first signs of the campaign’s impact showed up in the company’s year-end results for 2018, when the general insurance company, which trades on the market as GENAC, generated profit after tax of $285.4 million. This was a $64.2 million or 29 per cent improvement over its 2017 first-quarter results.

Gross premiums in the period also grew 23 per cent to $8.7 billion.

GENAC Managing Director Sonia Donaldson said the insurance company grew new business by 30 per cent, which she attributed to the returns from the company’s marketing thrust.

At the start of 2018, General Accident launched a full-bore advertising programme, the spend for which contributed to the tripling of the company’s expenses to nearly $44.5 million. Its image was plastered over all media, including Internet placements. The campaign tapped the celebrity talent of DJ Bambino to help drive GENAC’s message, in a clear indication that they were going after a younger demographic. This was new territory for General Accident, according to Donaldson.

“We were not a company that relied on advertising and marketing, but the promotion that we did with ‘Autosmart Fast Fast’ and ‘Do It’ are the only things we’ve done differently,” she told the Financial Gleaner.

The gains at the top line have continued into the first quarter ending March. Gross premiums rose from $2.2 billion to $2.69 billion, and net premium performance was even better, having risen 32 per cent to $485.36 million.

Net profit grew six per cent to $30.87 million. But the company, faced with a fall in the fair value of equity investments to the tune of $33.25 million, reported negative comprehensive income of $2.38 million for the March quarter.

Donaldson was not too perturbed by the quarter’s comprehensive performance, citing the nature of the business.

“The insurance business has a long tail and is pretty cyclical. Last year’s performance is just that, last year’s. Fortunes do change as the year progresses; so whereas the income is relatively certain, the loss experience never is,” she said.

neville.graham@gleanerjm.com