Bahamiam firm to take major stake in Sagicor
(CNS): Three quarters of the Cayman-based insurer Sagicor General Insurance will be acquired by Bahamas First Holdings before the end of this month, according to media reports. The remaining quarter will stay in the hands of the Cayman Islands Government. The acquisition of a 75.24 percent stake in Sagicor is now awaiting approval from both CIMA and its Bahamian counterpart before the deal is finalized. Sagicor gained its government partner in 2005 when it purchased a 51% share in Cayman General, which government acquired as a result of a deal in the wake of Hurricane Ivan.
Patrick Ward, Bahamas First Holdings president and chief executive, told Tribune Business that the acquisition of the 75% stake would help to diversify the Bahamian general insurer’s revenue base and risk concentration. The "target date" for closing the transaction was end-March before close of the first quarter dependent on the regulators in both Cayman and the Bahamas.
"We expect this acquisition to be accretive to group earnings from day one," Ward told Tribune Business. While Bahamas First and Sagicor was still finalising figures related to the acquisition, such as the total level of assets involved, he said Sagicor Cayman had in excess of $50 million gross written premiums in 2009.
"We’ve always been looking for the right opportunity to diversify our premium or revenue base, and Cayman has a number of attractive features that signify that it is the right opportunity for us," Ward explained. "It’s got a stable economy, the currency risk factor is not a major one, because the Cayman dollar is traded at a higher level than the US dollar, and the operating environment is very similar to what we have in the Bahamas.
Bahamas First’s minority partner in Sagicor General, with just under a 25 per cent stake, will be the Cayman Islands’ government. "I think there’s something to be said for diversifying your revenue base when operating in a catastrophe zone, and this is something AM Best has called for from a number of companies in the region, including Bahamas First," added Ward.
Category: Business
Wonder what they will do with their health insurance business. Bahamas First has no knowledge in this area. Refer to a press release in the Caymanian Compass in November 2009. Should businesses trust keeping their health scheme with a company that has no knowledge in this area at all?
Errr, hello Government. Wouldn’t this be a good time to sell an asset?
This is no asset – it is a liability!
The Community has lost confidence in these Insurance Companys, as they are set up here in Cayman for a few months and fterwards sold to any Johnny come lately. One of my friends told me that she had bought a XXXXXX Policy and her premium was $80 PER MONTH. Within three years or so she received a letter from the companytelling her that the new premium would be $233 per month as the premium would not cover her down through life. She was offered another choice of paying the same old premium and reducing the coverage, which do not suit her as she has a loan from one of our local Banks for her house. The poor lady is frustrated as she just cant manage this outrageous premium. This increase of premium is is almost three times the amount as what she has. Ijust want to find out who deals with these outrageous premium increases. If the Company underpriced the Insurance plans then they should only be allowed increase on their new clients. I ALSO UNDERSTAND THAT THESE LETTERS WAS SENT TO QUITE ALOT OF CLIENTS.
This should be reported to the Head of Insurance at the Cayman Islands Monetary Authority. When an insurance contract is signed, the insurance company does not have a right to increase the premium in the middle of the contract and it is illegal to do that. In term life policies, premium cannot be increased until the policy is cancelled or lapsed. In this instance, insurance company concerned is trying to get the innocent customer to do what it cannot do legally. The insurance lobby is so strong in Cayman, the Monetary Authority usually takes a back seat when there are complaints against insurance companies. If you see this is going to happen here, please make a official complaint to the Complaints Commissioner against the Monetary Authority. We need a Consumer Protection Agency in Cayman to stop abusing the innocent consumers by these businesses.