Sagicor General sold

No effect on Cayman operation

Bahamas First Holding Limited has
bought a 75.24 per cent interest in Sagicor General Insurance (Cayman) Ltd.,
subject to approval from the Cayman Islands Monetary Authority.

The Sagicor Group will, however,
retain its life insurance interests in the Cayman Islands.

The insurance company was known as
Cayman General up until September 2006. 
Sagicor bought a controlling interest in the company in 2005 and then
another 24 per cent of the shares in 2006.

Sagicor General Senior Vice
President Property and Casualty Michael Gayle said the company’s name would be
changed soon.

“We have not resolved the name
issue yet,” he said. “We expect that to be resolved in the next couple of weeks.”

The sale will not affect staffing
in Cayman, including the management of the company, Mr. Gayle said.

“Indications are they are happy
with the management structure,” he said. “In fact, one of the conditions of the
purchase was that senior managers had to give a verbal commitment to stay on
for a certain length of time.”

Mr. Gayle also believes the
purchase will enhance the insurer’s Cayman operations.

“We regard this as a very positive
thing,” he said. “There are synergies that exist now that didn’t exist before.”

Mr. Gayle said the purchase would
allow the insurer to expand its product line.

“We have been able to write certain
types of policies that we couldn’t write in the past,” he said.

Mr. Gayle said the purchase would
not affect insurance rates in the short term and in the longer term it might
have beneficial effects on the rates.

“We hope that in due course, this
could give us access to better reinsurance,” he said.

The sale will necessitate Sagicor
Life moving to different offices.  The
two insurers moved into common offices last year.

“We’ve already started [the move],”
Mr. Gayle said, explaining that the general insurer will remain in its
long-standing offices in the Harbour Place building, while the life insurer
will move to ground floor offices in the same building.

The sale comes after the Sagicor
Group reported a $395 million loss in 2009.  
Sagicor could still have a contingent liability resulting from the
still-unresolved litigation involving the post-Hurricane Ivan reconstruction
project at the Winsdor Village condominium complex.

Mr. Gayle said he preferred not to
comment about the Windsor Village matter.

“There is a lot of legal posturing
and we’re almost observers in all this,” he said. “It would not be appropriate
to say anything more.”

The Cayman Islands Government still
owns a little more than 24 per cent of the insurer, which it received as part
of a negotiated settlement with Cayman General Insurance for its Hurricane Ivan
insurance claim.

Premier
McKeeva Bush confirmed Wednesday that the government was “looking at” selling
its shares in the insurance company. 

 “But
were not agreeing to any sale that leaves government with any responsibility,”
he said, referring to the potential liability arising out of the Windsor
Village litigation.  

A
major sticking point on the sale would be the purchase price. Mr. Bush said the
government would “want to receive what we put into it”.

Although
it’s been explained by the government and Cayman National Corporation
differently on several occasions, Auditor General Dan Duguay and others believe
the government accepted the shares in Cayman General in lieu of $20 million in
the Hurricane Ivan insurance claim settlement.   However, the shares are not worth anywhere
close to that amount.   When Sagicor
purchased the 51 per cent controlling interest in Cayman General in 2005, it
only paid US$10 million.  Cayman General
disclosed in its audited financial statements at 30 September 2005 that the
fair market value of the shares was just under $3 million.

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