1 month ago
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Jamaica National Group is selling its general insurance business, JN General Insurance Company Limited, to rival operator British Caribbean Insurance Company Limited, BCIC.
JN General’s clients will be unaffected by the pending change, the companies said in a joint release, which also asserted that JNGI, which has been racking up hundreds of millions in losses “remains financially strong, with solid reinsurance agreements”.
Both JN and BCIC declined requests for additional comment on the deal before the formal agreement is signed and sealed.
A source close to the deal, while quoting the adage, “there can be many a slip between cup and lip”, told the Financial Gleaner that the two institutions were being cautious as there was no agreement as yet on key terms, such as final price, new name, if any, or whether the transaction will be structured as a transfer of engagements, instead of outright purchase.
JNGI’s assets were estimated at just under $11 billion at year ending December 2023. The company recorded $8.36 billion of insurance revenue, but it wasn’t enough to cover the $5.49 billion in insurance service expenses and the $3.89 billion in net expenses from reinsurance contracts, producing a loss of $1 billion on its core service.
Most of those losses flowed to the bottom line, with JNGI reporting a net loss of $527.50 million. The bleed nearly doubled the losses of $238.14 million racked up in 2022.
BCIC, which is a member of VM Group, held $18.29 billion in assets up to December 2023. Insurance revenue was $16 billion, while its insurance service segment netted $714.75 million after expenses.
BCIC closed 2023 with net profit of $420.19 million.
Operating from its head office at King Street, Kingston, JNGI has a network of 10 branches in major towns in most parishes, the exceptions being Trelawny, Hanover and St Thomas. BCIC is headquartered at 36 Duke Street, Kingston, with a network of seven branches.
The two general insurers have overlapping operations in Kingston, Mandeville, Montego Bay, Ocho Rios and Savanna-la-Mar.
There is no indication yet as to what will happen to staff in the overlapping locations.
The companies said in the joint release that they have “agreed on the key terms of the deal and have informed their employees”, but business continues as normal at the JNGI locations.
The transaction is subject to regulatory approval, which the companies have indicated they expect to receive, and thereafter finalise the deal in the weeks ahead.
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