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.