Motivated by decades of success in the industry as executives but lacking the necessary capital to set up theirown insurance company, Ziadie and Smith have sought to make an inroad by using their expertise as facilitators ofthe business instead. Just under a year ago, they acquired a majority 70 per cent stake in the insurance brokeragearm of the Maritime & Shipping Group of Companies - Maritime General Insurance Brokers (MGIB), with an aim to transform the company from one of the relatively smaller players in the subsector to one of the largest within thenext five years. 

"Tommy and I have been in the insurance industry for a long time; both of us working for organisationsthat weren't our own and making a lot of money for these organisations," noted Ziadie to the Business Observer."We thought that the time had come; with our experience and knowledge, it was a perfect ingredient for a successful operation that the two of us could launch for ourselves." 

Ziadie's 40-year career in insurance includes a 16-year stint as general manager/director of General Accident Insurance ending in 2001, and for five years up until 2006, he served as managing director of NEM Insurance Company Limited. Smith's own 30-year career is comprised of a five-year tenure as managing director of CGM Insurance Brokers Jamaica Limited (formerly International Insurance Brokers) and two years as the regional director for that company. 

According to Ziadie, who is the executive chairman of MGIB, some 70 to 80 per cent of insurance business is generated through brokers. However, it is his belief that a large portion of the market is being underservicedbecause of unsatisfactory customer service, paving the way for the Ripon Road, Kingston headquarterd MGIB to make significant strides through this channel. 

"We thought that the service side of the industry needed an organisation with the expertise and personalities that we both have and could provide to the marketplace because the quality of service has dwindled," said Ziadie. "We thought that we could sure up that quality by setting up this new company and by offering our clients the type of personalised service that was missing out of the industry."

Perhaps even more critical considering the challenges local businesses currently face withburdensome overhead costs, is MGIB's cost management strategy, which Ziadie and Smith commenced upon acquisition by scrapping the company's unprofitable motor-vehicle insurance portfolio. According to Ziadie, before the acquisition, the brokerage's portfolio was 95 per cent motor insurance. However, due to hefty administration cost, it was costing the company some $4000 per policy to service while it only earned about $2000 to $3000 per policy.

"We were actually paying people to walk through the door here," argued Ziadie. "We believe that motor insurance should be dealt with by motor insurance companies; our philosophy is one where we don't think an insurance brokerage house is set up to handle the day-to-day handling of motor insurance."Premiums are very low and insurance companies don't pay much commission; plus when you are writing a large portfolio of motor insurance, it takes a large staff to administer to it," he continued. "So, it cost us a fortune to administer it and at the end of the day a man will walk through the door and just want a third-party insurance." 

Another highlight of the company's thrust to become more efficient is its investment in an advanced brokering software package known as the "Broker One". This interactive tool, Ziadie said, is the first step in the company's plan to have a paperless operation in the near future. 

"What the (insurance) companies are hoping to do, and we are helping to drive, is for us to both be linked on a daily basis so that we can tap into their software so that we can send them instructions and enquiries," disclosed Ziadie. "We want to get rid of paper and move into full time technology; we want to make it painless and paperless." 

MGIB has a more diversified portfolio now than before the acquisition, with its primary target being commercial operations. Its facultative broker status, as licensed by the Financial Services Commission (FSC), allows the company to source from its overseas facilities, coverage for large industrial companies that is unavailable locally."We are a licensed facultative broker," notes Ziadie. "Some of the corporations cant get the type of insurance coverage from the registered companies in Jamaica because they are not large enough - their balance sheet can't handle it." 

Another target area of MGIB's is residential insurance. Ziadie said that the fact that home insurance has higher values, more premiums, less administrative cost and offers more commission than motor-vehicle insurance madeit an obvious target, and added that the company was especially attracted to the potential the segment had for future growth. "About 60 to 70 per cent of peoples' home are not insured for a variety of reasons - either they cant afford it, they don't know about it or they just don't want it," disclosed Ziadie. 

"Also, about 60 per cent of the insured are underinsured because they are not getting the service that they need from this market to advise them on an ongoing basis; so we hope to provide a good package of insurance coverageand to support that with a service that we are confident that we can give." 

While MGIB currently owns a mere three per cent of the insurance brokerage market, with companies such as CGM and Allied much higher on the pecking order, Ziadie is confident that the company is on the right path to being one of the higher-tier companies. 

"We want our clients to know that we take this business very seriously and we want people to know that we bring a very positive attitude to business and service," said Ziadie. "In the next five years we will be among the top brokers in Jamaica."