General Accident posts record profit even as Hurricane Melissa drives rare quarterly underwriting loss

General Accident Insurance Company Jamaica Ltd (GenAc) closed 2025 with its strongest annual profit on record, even as Hurricane Melissa pushed the December quarter into an underwriting loss.

It was also the first time catastrophe claims have been large enough to overwhelm the company’s net insurance result in a single period.

Group after-tax profit rose 61 per cent to $399.6 million, or $0.38 per share, from $248.3 million a year earlier. Insurance revenue grew 13.5 per cent to $12.97 billion. The full-year insurance service result held positive at $259.8 million, marginally above $248.9 million in 2024, but that headline figure masked a sharp deterioration in the fourth quarter, when the insurance service result swung to a loss of $63.3 million from a $33.7 million gain in the same period a year earlier. “In a catastrophe year, we can’t earn profit commissions ... there’s no profit there to earn a commission on,” said CEO Sharon Donaldson.

Once Melissa’s claims crossed GenAc’s retention threshold, reinsurers absorbed the excess — but not before the company had paid a meaningful deductible from its own account.

“General Accident’s catastrophic deductible for its own account was significant enough to wipe out the profit that it made up to September,” she said.

Independent modellers placed Jamaica’s total insured losses from Melissa at US$2.2 to US$5 billion, with estimates from Verisk, Moody’s RMS and KCC ranging across that band.

The scale of reinsurance activity in a catastrophe year is visible across the balance sheet. GenAc’s reinsurance contract assets – amounts recoverable from reinsurers – surged to $9.27 billion at year-end from $3.05 billion a year earlier. It propelled total assets to $21.7 billion from $12.2 billion a year earlier.

Donaldson was careful to note that the reinsurance recoverable balances are not the company’s own funds.

“Those funds that came in from the reinsurers are not our assets,” stated Donaldson. “It’s in fact a liability because it’s a refundable amount. Any investment income earned on it belongs to the reinsurer. It’s not our cash. It’s advance payment.”

That distinction matters for Jamaica’s asset tax, which Donaldson argued does not apply to these pass-through balances — a point that lands in a live policy debate about the tax’s distortionary effect on financial-sector balance sheets.

That balance sheet expansion did not erode liquidity. Operating cash flow reached $2.65 billion for the year, and cash and equivalents ended at $3.95 billion, up from $2.15 billion at the start of 2025.

Looking ahead, Musson, which owns 80 per cent of GenAc — completed its acquisition of Beacon Insurance Company Limited on October 31, 2025. Donaldson said the integration is proceeding through the first quarter of 2026, with General Accident’s Trinidad operation eventually to be merged with Beacon subject to regulatory approval. Both brands will be maintained in Trinidad and Tobago and Barbados, and Beacon CEO Christopher Woodhams will report to Donaldson overseeing combined Trinidad operations. The deal adds markets in Dominica, Grenada, St Kitts, St Lucia and St Vincent, and lifts projected group premiums above $32 billion.

neville.graham@gleanerjm.com