Motor and General Insurance has
been acquired by Caymanian owned dms Organization Ltd, after the company beat out
several international bidders with an all-cash offer at what dms officials
called a premium price.
The company signed a definitive
agreement to acquire 100 per cent of the longest established insurance firm in
the Cayman Islands, which will now be called Saxon Motor and General Insurance.
In a separate transaction, dms
Properties Ltd, a subsidiary, acquired the entire portfolio of commercial
property owned by Motor and General in the Cayman Islands. Completion of the
transaction is expected during the fourth quarter of 2010 and is contingent on
approval of the Cayman Islands Monetary Authority and the Central Bank of
Trinidad and Tobago, as well as other closing conditions.
Managing Director of dms Don
Seymour said, “No changes to existing staff or services to existing clients of
the company are planned.”
Mr. Seymour added that, “Ultimately
Saxon MG will deliver low-cost auto insurance to all consumers. We believe that
irrespective of the value of your car, everyone is interested in saving money
on their car insurance.”
Saxon MG is now the only wholly owned
insurance company in the Cayman Islands.
“Since we are not foreign owned,
local consumers can be completely confident that Saxon MG will always act in
their best interest and every dollar spent on car insurance will be reinvested
in our locally economy and not sent overseas. This is an important consideration
in our difficult economic situation, as everyone is being challenged to do
whatever they can do to help grow Cayman’s economy, stimulate job creation and
build a stronger community,” said Mr. Seymour.
On 15 June, the Central Bank of
Trinidad and Tobago, the insurance regulator in that country, issued an order
directing Motor and General to suspend operations for 60 days. The order was
also applicable in the Cayman Islands because Motor and General was not
incorporated here, but instead operated as a branch office of the parent
Trinidad And Tobago Company. The reason for the order made by the Central Bank
in Trinidad and Tobago at the time was that the company’s returns for 2007 and
2008 were filed late and incorrectly.
However, Walkers Attorney Mathew
Gouke, who represented the local controllers of the Cayman branch, David Walker
and Ian Stokoe of PriceWaterhouseCoopers, announced some months ago that, “It
does appear the Cayman Islands insurance business is a sound one and generating
a profit. I think people in both jurisdictions recognise that the Cayman
business is a solid one.”
A petition approved by Chief
Justice Anthony Smellie broadened the powers of the controllers, who were
appointed by the Cayman Islands Monetary Authority, paving the way for the sale
of the insurer’s business portfolio.
Mr. Seymour said, “Historically,
CIMA did a brilliant job of identifying and managing the risks of this
operation. In fact, the organisation did such excellent work that the proceeds
from the sale of the Cayman operation will actually be used to prop up the
Trinidad operation that has severe financial difficulties.”
He added that this proved
internationally that excellence of regulation in Cayman, as well as the
dynamicism of our economy an underscored why this was a good business move for
“This company actually fit well
with our philosophy of value investing. Its core business fundamentals are very
strong and the market for insurance in continually growing. There was an intense
bidding war for this company and in the end, we had to pay a substantial
premium to win, but it is a strong performer that is well capitalized, has a
track record of profitability and is set to deliver strong returns,” said Mr.
Seymour. “Either you believe in Cayman’s future or you don’t. Our investment
speaks loudly about what we believe and are completely committed to.”