General Accident Insurance is moving up to play with the big boys on the JSE’s Main Market. 

Insurance company General Accident will be making the big leap from the Junior Market of the Jamaica Stock Exchange to the Main Market.

If you’re into numbers then you’ll love this. Genac was the 12th company to be listed on the Junior Market on September 30, 2011. Their move to the Main Market is scheduled for September 27, 2023 – almost 12 years to the day that they listed. September 30 this year is a Saturday so no trading, but maybe I should still buy 12 in cash pot. 

Anyway, despite their name, the company offers more than just accident insurance. They also do property and travel insurance, as well as other niche types of insurance like marine cargo and engineering insurance. 

The company is doing pretty well.  Revenues for the first six months of this year were up 36%.  They made $5.2 billion, with net profits of $246 million. They also have offices in Trinidad and Tobago and Barbados.

So, you’re probably wondering why they’re making the move. Don’t junior market companies get awesome perks? Well, true. One of the main motivators for companies listing on the Junior Market is the 10-year tax break.

For the first five years, companies pay zero income taxes, then 50% for the next five years. But Genac’s tax break ended in 2021, so now they pay 33 1/3% on taxes like every other regulated company. So, that’s not really a consideration anymore.

Plus, the Main Market doesn’t have that $500 million cap on share capital. Right now, Genac’s share capital is around $470 million, so there’s not much more room.  By moving to the main market, the company can raise additional funds without breaching JSE rules. 

There’s also the pride that comes with graduating from the Junior Market. They’ll be up there with the big boys – the NCBs and GraceKennedys. 

On the flip side, moving to the Main Market will mean a decent bump in the company’s listing fees, from just under 2 million dollars to over 3 million. Plus Main Market companies are subject to some fines for breaching JSE rules that Junior Market companies aren’t, and Genac has published a few reports late this year. So that’s something they’ll have to be more consistent with.

And that’s the bottom line.