As more businesses are forced to rewrite their corporate plans, and no bottom in sight for the economic downturn, the Financial Gleaner has learnt that one leading investment retailer, Jamaica Money Market Brokers (JMMB), will be pulling down the shutters on its insurance brokerage operations.
The principals of the publicly-listed brokerage would not deny or confirm plans for the closure of JMMB Insurance Brokers Limited, but instead group spokeswoman Marguerite Cremin said they were currently reviewing all their business lines as part of the company's strategic planning review process.
However, usually reliable sources told the Financial Gleaner that the action by JMMB to exit the insurance brokerage business was essentially a done deal. The official decision is expected to be announced by the end of January.
It was not immediately clear what the financial health of the JMMB Insurance arm is - though financial disclosures in the past have indicated declining performance - or whether the business will be sold or wound up.
It is not a requirement of existing regulatory legislation for an insurance brokerage to report the closure of its operations to the Financial Services Commission, but the FSC says it encourages the disclosure especially in circumstances where the business is being sold in order to ensure that the acquirer meets fit and proper requirements and is licensed to transact insurance business in the Jamaican jurisdiction.
The 17-year-old JMMB launched its insurance brokerage arm in February 2005 marketing it as a vehicle to offer clients customised products to assist in the achievement of their financial goals.
The brokerage, which sources and provides life and health insurance products, is headed by Lancelot Henry.
Challenging year
In the company's 2007 annual report, Henry said the JMMB subsidiary had a challenging year, mirroring its parent whose profit fell 25 per cent, from $1.6 billion to $1.2 billion profits.
However, he expressed confidence that the entity would be able to continue delivering quality service to clients.
The group website reveals that JMMB Insurance currently markets six life insurance products and offers two health insurance policies: the blue care health plan from Blue Cross of Jamaica, which was acquired by Sagicor Life Jamaica in December, and the shore plus plan, also from Sagicor Life. It is not known if the change of ownership of the health care insurance provider had any bearing on JMMB's decision.
In recent times, JMMB has been seeking to shore up its capital base and in October last year, sold its 45 per cent stake in its Trinidad-based affiliate, Caribbean Money Market Brokers (CMMB), bolstering the company's asset base by US$41.37 million or J$3 billion, the selling price of its CMMB interest.
At the end of September last year, JMMB's capitalisation was $5.6 billion, while its stock market value is $8.8 billion, based on its last trading price of $6 per share.
The company also reported six months net profits to September of $1.1 billion with net interest income up 44.6 per cent.
JMMB, a pioneer in popularising money market investment in Jamaica since 1992, has been involved in brokering and dealing in money market instruments, bonds and options; foreign currency trading; funds management; providing financial advisory services; corporate finance; securities trading; and insurance brokerage.
sabrina.gordon@gleanerjm.com