The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

J. S. Johnson is aiming to “double” its Turks & Caicos islands book of business within the next two years, its managing director telling Tribune Business that it had to be “mindful” that foreign insurers were entering the Bahamian market.

Alister McKellar said that while the Turks & Caicos portfolio accounted for about 10 per cent of the BISX-listed broker and agent’s total $100 million annual premium portfolio, it was having a “positive impact on group results”.

Disclosing that J. S. Johnson had acquired another small broker/agent business on that island, following its purchase of Fidelity’s insurance business in Turks & Caicos, Mr McKellar said the company was continuing to look for “the right opportunity” for further Caribbean expansion.

“Turks & Caicos is improving, and it’s starting to have a positive impact on the group’s results,”he told Tribune Business. “We did two acquisitions down there, and are looking to build and improve upon that. The attraction was that we were looking to grow.

“In J. S. Johnson terms it’s small, about 10 per cent [of the business]. We’re looking to improve some of the efficiencies, because it’s another territory, increase the synergies and operational procedures.

“There’s no reason why, within a 12-24 month timeline, we shouldn’t be able to double our book down there, all circumstances being equal.”

Mr McKellar described the Turks & Caicos expansion-by-acquisition as “a natural evolution” for J. S. Johnson, which first entered that market in the 1980’s as a sub-agent.

He added that the BISX-listed broker and agent had explored the possibility of expansion into other Caribbean markets, and identified the Cayman Islands as a likely best fit should the company choose to pursue that option.

“We’re always looking, but it’s the right opportunity,” Mr McKellar explained. “Cayman is a natural, and we have looked at it on a number of occasions. We’ve had a number of deals down there, but they have not materialised.

“Cayman is a natural because of the location, language, and proximity on the direct British Airways flight.”

And he added: “We need to be mindful that these southern entities [rival Caribbean insurers] are looking to come into our market, and we need to be globally thinking.

“With our size, we get to a saturation point. It’s more difficult to find organic growth opportunities when your the size of operation that we have.”

J. S. Johnson deals with around $100 million worth of insurance premiums annually. It places some 40-45 per cent of these with Insurance Company of the Bahamas (ICB), its 40 per cent-owned affiliate general insurance underwriter, with 10-15 per cent placed with both Lloyd’s of London and regional carrier, Island Heritage.

The remaining 30 per cent is placed through its life and health brokerage business, which was designed to provide a ‘one stop shop’ at J. S. Johnson for all client insurance needs.

While J. S. Johnson, in common with the rest of the Bahamian insurance industry, had seen a “steady decline in the value of motor insurance premiums written over the past four years, Mr McKellar said this trend appeared to have “flattened out with a slight improvement overall” in 2012.

He added that establishing a J. S. Johnson office in western New Providence was a “natural” move given the area’s development over the past two years, but said this would depend on a turnaround in the overall Bahamian economy.

“There’s a good reason for considering it, but it’s an expense factor,” he explained. “With a booming economy, the timing may be right. At some stage, you will see us with a presence.”