IronRock shrugs off Q3 loss, foresees better outcomes at year end

IronRock Insurance Company Limited has reported losses of $10.13 million for the third quarter ended September 2025, reversing a profit of $7.8 million in the corresponding period last year.

But CEO Christian Watt insists the company remains firmly on track to deliver on its annual objectives, notwithstanding the impact of Hurricane Melissa.

“The nature of our business makes it very difficult to assess performance quarter to quarter in terms of profitability, especially for a small insurer like us, because of the volatility of claims,” Watt said in an interview with the Financial Gleaner.

“Our review is always on an annual basis. If you look back at the last six years, you will see the volatility in Q1 to Q3, and then in Q4 you see the results come in. That has a lot to do with reconciliations that are done in that last quarter in terms of profit commissions, reinsurance recoverables, etc,” Watt explained.

IronRock’s insurance revenue climbed 21 per cent to $534.8 million, while reinsurance contract expenses surged 30 per cent to $358.1 million, reflecting higher catastrophe reinsurance rates and expanded portfolio coverage. The general insurer also onboarded new staff to bring in more business.

Insurance service expenses rose 12 per cent to $164.9 million, resulting in an insurance service result of $11.8 million, down from $20.3 million in the comparative period in 2024.

Investment income provided some cushion, increasing to $24.9 million, but operating expenses — driven by professional fees and expansion costs — rose to $51.8 million, tipping the company into the red.

Year-to-date, January-September, IronRock has recorded a loss of $41.6 million, compared to a profit of $8.3 million in the prior year. Still, the company’s balance sheet remains robust, with total assets of $1.7 billion, compared to $1.5 billion a year ago, and shareholder equity of $752 million, which is slightly diminished from $763 million.

Watt is confident that the final quarter will restore profitability, citing the structure of IronRock’s reinsurance arrangements.

“It’s not really hoping — we plan for it, we strategise for it. Our reinsurance structure rewards us at the end of a year of performance,” he said. “There are no definites in insurance, but history shows that we have consistently grown profits and paid dividends for three years in a row. This quarter does not alarm us.”

Watt added that the fourth quarter typically captures profit commissions and reconciliations that are not booked earlier in the year.

“The nature of the risk incorporated into our financials gets reconciled at the end of the year,” Watt said, adding that the company’s growth strategy — expanding offices and team capacity — has been achieved at the top line.

Hurricane Melissa, which struck Jamaica in late October, is testing the general insurance industry’s resilience.

Watt acknowledged the economic fallout but downplayed any threat to IronRock’s solvency. “Melissa has been tough for the whole island, but given the strength of our balance sheet, Melissa will have virtually no exposure to IronRock in terms of capital adequacy or solvency,” he said.

Meanwhile, the company has already started settling claims.

“We have started to pay our commercial customers — interim payments to get their operations started, clean-up costs, and buying back stock. We’ve cut cheques and closed motor vehicle claims already. We’re happy to help Jamaica restore in our way,” the IronRock CEO said.

While the property and commercial segments bore the brunt of Melissa’s impact, marine and motor exposures remain minor for IronRock. Watt reiterated that the company’s strong reinsurance programme and capital position ensure stability despite the catastrophe claims.

“We’ve explained it at AGMs and to the investing public — the insurance business cannot be viewed like a consumer goods company; risk and uncertainty are priced in, and reconciled at year end,” he said.

neville.graham@gleanerjm.com