The Initial Public Offer (IPO) for general insurance Provider, Key Insurance Limited will open this morning.

According to the company prospectus, it is targeting $119 million through the sale of some 92,115,215 units (some 73million of which are reserved for JMMB clients) at a price of $2.27 per share.

There is an overallotment option of 18.14 million units which will be offered in case of over subscription.

The dividend being offered is at least 25 per cent of net profit.

The company says the proceeds of the IPO will be used to increase capital in order to grow core business; take advantage of opportunities to expand; and pay the expenses of the IPO.

Key Insurance is hoping to list on the Junior Market of the Jamaica Stock Exchange before incentives expire on Friday. The company says it hopes to take advantage of the concessionary regime of the Junior market which currently offers entrants five years freedom from corporate tax and other incentives.

The company prospectus indicates that in 2015 gross premiums written at Key insurance totalled $961 million which was 32 per cent more than 2014 when $729 million in premiums were written.

The company’s claim ratio averages 24 per cent, which it says is among the best in the industry.
Total comprehensive income for the year was $52million compared to $15 million the year before. The prospectus notes thatresults in the future would benefit from the tax regime of the Junior market.

Key insurance indicates that its results for the minimum capital test at December 31, 2015 was 347.44 per cent, compared to the250 per cent required by the Financial Services Commission (FSC), due mainly to$881 million currently held in shareholders’ equity at that date.