JMB insurance portfolio to be sold separately says Development Bank of Jamaica


Edison Galbraith, Acting General Manager of the Development Bank of Jamaica told Jamaica Money Daily on January 30, 2025, that under the divestment project underway for the Jamaica mortgage bank, the privatisation unit will put to tender and identify a strategic investor for the mortgage insurance portfolio administered by the JMB on behalf of the GOJ.


The Jamaica Mortgage Bank (JMB), which is a construction financier also insures mortgages, indicates that the state-run bank sees increasing participation from mortgage providers in its mortgage indemnity insurance fund, referred to as MII.

The JMB as an entity is set for divestment by the Government of Jamaica via the Jamaica Stock Exchange. However, the insurance portfolio will apparently be stripped out for sale to interested investors.

Major mortgage providers, currently comprising eight institutions, are covered by the fund, which was last reported at $2 billion in value, covering 1000 policies which the manager says likely represents the riskier accounts held by mortgage holders.

Approximately 90 per cent of the total fund is invested. Performance compares to $1.4 billion in 2017 and coverage of 900 policies. Participating institutions have also expanded in number from six.

The fund has a history of no claims. The purpose of MII is to protect mortgage lenders against loss in the event of default by mortgagors. MII premiums are a one-time payment calculated at seven per cent of the value of a housing loan for the life of the policy. Each housing unit is covered individually. The mortgage bank will under-write up to 25 per cent of a mortgage.

Subscribers to MII were last reported as including CIBC FirstCaribbean International Bank Jamaica (FCIB) National Commercial Bank (NCB), Sagicor Bank, Sagicor Life, Victoria Mutual Building Society (VMBS), First Global Bank (FGB) and First Heritage Co-operative Credit Union (FHC).

The MII helps to reduce lending risk of the financial institutions (FIs).

The actual mortgage market in Jamaica is valued at around $500 billion with default rates ranging in between three and five per cent. It is likely, the JMB indicated that mortgage companies only insure their riskiest mortgages.

The MII premium is a onetime payment with payments made per property. Once there's a default with the FI and the upper portion insured by us is not recovered by the FI, then a claim is made on the MII.

However, it has been noted, 100 per cent of the time the portion covered by is already paid down or because of the appreciation of real estate in Jamaica. Oftentimes the FI is able to recover fully.

The JMB insures both residential and commercial but to date those insured by loan companies are residential.

There has been no call on the fund for pay out, however perceived risk may be on the increase. In 2022 premiums were 31.1 per cent higher compared to 2021.

Management previously noted that although the growth in housing development may be viewed as rapid, the output remains substantially below the 15,000 units required each year.

Additionally, it is noted, growth in the average value of mortgages invites a conversation about increased property values and higher percentage mortgages (loan to value).

“Based on these indicators, Jamaica Mortgage Bank, being an interim financier and the administrator of the Mortgage Indemnity Insurance product is well positioned to maintain its relevance and importance in the housing market,” it was stated by the JMB’s management.

Photograph: Edison Galbraith, Acting CEO of the Jamaica Mortgage Bank

Caribbean Money Daily

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