Demerara Life sees 27% decline in policies issued last year
Premium income up by 1.8%
August 31, 2002
The Demerara Mutual Life Assurance Society Ltd saw a 27% drop in new policies issued and its premium income rose by $13.3M or 1.8%.
Addressing shareholders at the society's annual general meeting held at the Ocean View Convention Centre on Tuesday afternoon, its Chairman Richard Fields said that last year was a very turbulent one for all insurance companies. Declining interest rates with mergers and, or acquisitions forced the society to review its management and information systems for greater efficiency and productivity so as to retain its market share in the region.
The society's market share is currently 20% in Guyana, 30% in Grenada, 17% in St Vincent and five per cent in St Lucia.
Fields said that business in Guyana was for another year further affected by a stagnated economy caused by the unstable political environment and the Regent Street fire of April 9, last year.
Noting that the insurance industry faced further challenges caused by the September 11 terrorist attacks on the US last year, he said that several large re-insurers had gone out of operation causing reinsurance rates to skyrocket.
These factors, coupled with the Eastern Caribbean experiencing a tremendous downturn in their economies as a result of the decline in the banana and tourism industries, he said severely impacted on the sales force's ability to achieve the society's production objectives.
The generation of new business in Guyana, Grenada, St Vincent and St Lucia by the society last year, Fields said brought 2,050 policies with an associated sum assured of $4.3 billion and an annualised premium income (API) of $116,308,053. To Demerara Mutual, he said, this represented a decline of 27% in the number of policies issued, 31% in sum assured and 44% in annualised premium income over the previous year.
In Guyana, 1,180 policies with an associated annualised premium income of $23.3 million were issued, representing a 22% decrease of API over the year 2000. The Eastern Caribbean branches accounted for 870 policies with an associated annualised premium income of EC$1.3 million ($90.5 million).
Clarke's Branch, he said continued to be the leading branch in Guyana with an annualised premium income of $9.5 million and 603 policies followed by Legall's Branch with an annualised premium income of $4.3 million and 212 policies.
In the Eastern Caribbean Territories, Desir's Agency of St Lucia emerged as the leading agency, followed by Humphrey's Agency of Grenada.
In terms of real estate investment, Fields noted that the commercial building at 63 Robb Street, Lacytown, Georgetown has attained 72% tenancy with most of the untenanted areas temporarily converted and will be rented for meetings and seminars until such time that suitable long-term tenancies are negotiated.
He said that Demerara Mutual was also reviewing the economic use of all its commercial properties both in Guyana and the islands with the aim of increasing the returns from these investments.
Meanwhile, Fields said that the Demerara Mutual will once again grant another 16 bursaries - ten in Guyana and two each to Grenada, St Vincent and St Lucia. The granting of these bursaries, he said will bring the total granted from 1997 to 99 with a value of $1.3 million for Guyana, and EC$119,000 for the Eastern Caribbean Territories.
Demerara Mutual's fire and general insurance subsidiary registered gross premium income of $113.6M, 26.3% over the previous year.
A feature at the AGM was votes taken on several resolutions amending the laws governing the operation of the society. The resolution calling for the government to pass legislation to repeal the society's act to allow females to sit on the Board of Directors was welcomed by all shareholders. The society's act currently contravenes provisions in the country's constitution which guarantee women equal rights as men. At present the all-male board comprises Fields, attorney at law Paul Fredericks, business executive David Yankana, Dr Leslie Chin, business executive Clifford Reis, Hugh George, and banker Stephen Backer.
Demerara Mutual also recognised a number of its employees for long service awards. Eleven persons were awarded for five years of service, seven for ten years of service, nine for 15 years and three for 25. The longest serving staff members are Sales Representative, Totaram Ganesh; Branch Manager of Berbice, Charles Gocool; and Sales Representative in Legall's Agency, Sase Omo.