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Canopy Insurance Limited, a joint venture between GraceKennedy Group and Musson Jamaica Limited, recorded a fivefold increase in profit in 2024, spurred by higher revenue.
“Canopy’s revenue growth in 2024 was driven by acquiring new customers and strategically diversifying our revenue streams. We prioritised service delivery, which opened new business opportunities, ultimately leading to record revenue growth,” said Canopy CEO Oliver Tomlinson in comments to the Financial Gleaner.
Revenue grew by 25 per cent to $3.9 billion, outpacing a 20 per cent increase in core costs, which stood at $3.7 billion. This widening margin contributed to a rise in net profit to $217 million from $39 million in 2023, which was Canopy’s first profitable year.
Prior to that, the life and health insurer recorded losses of $188 million in 2022, $168 million in 2021, $65 million in 2020, and $197 million in 2019. The company was founded in 2018.
Canopy plans to continue strengthening its financial position by eliminating its deficit, which primarily reflects build-out costs for the seven-year-old company.
“We aim to eliminate Canopy’s accumulated deficit by the end of the 2025 financial year. Our shareholders have made significant investments in the business, and we intend for them to start seeing returns on these investments by 2026,” Tomlinson said.
Canopy’s profit growth last year erased one-third of the deficit, pushing it to $364.6 million, compared to $581.5 million in 2023.
Former GraceKennedy Group CEO Don Wehby, who retired in February, previously noted that Canopy’s growth was driven by the “credible value” it provides to consumers, allowing it to expand its market share. He attributed its performance to three key factors: synergies from scale, product diversification, and the implementation of proprietary core software.
Over the years, steady double-digit revenue growth has enabled the company to achieve profitability.
Initially focused on providing group health and life insurance to GraceKennedy and Musson employees, Canopy has since expanded its offerings to external clients. Its product line-up now includes critical illness, personal accident, and family plan coverage.
Over the past year, its capital base grew to $945.4 million, up from $508.5 million, driven by higher profit and an infusion of $220 million from the proceeds of a share offer. Last April, the company issued 220 million ordinary shares equally between both partners, increasing its total ordinary shares to 1.31 billion units.
The latest data from the Financial Services Commission, which regulates the insurance sector, puts Canopy’s capital at roughly one per cent of the $116 billion in capital across the life insurance industry. Large insurers Sagicor Life Jamaica and Guardian Life control the bulk of the market.
Tomlinson’s outlook for the sector is positive.
“As long as risks to life, health and property exist, insurance will remain essential,” Tomlinson philosophised. “Nonetheless, the sector must continuously innovate to offer affordable and beneficial products that mitigate losses and create wealth for our clients,” he said.
As part of its own risk management strategy, Canopy reinsures with global firms Munich Re and Swiss Re. In 2024, the company terminated a quota share reinsurance treaty with Knutsford Re, a subsidiary of GraceKennedy, according to its audit report.
Tomlinson explained that the change was prompted by new accounting rules for insurance contracts – under IFRS 17.
“The arrangement ended due to the adoption of IFRS 17, which led our regulators to no longer recognise related-party reinsurance arrangements. Consequently, we discontinued the facility with GraceKennedy and transitioned to new arrangements to meet our regulatory ratios,” he said.
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