Dec 2015 Financial News

Guardian, Sagicor...No word yet on Clico portfolio

Dec 03, 2015

Despite issuing a statement updating the public about the resolution plan for Clico’s traditional portfolio, the Central Bank has not provided any details to two of the region’s largest life insurance companies, both of which are interested in acquiring the asset.

On October 14, Central Bank along with Clico engaged the international firm, Oliver Wyman as advisor to assist with the sale of Clico’s traditional insurance portfolio. The company, according to a Central Bank press release, is a leading global management consulting firm with specialised expertise in corporate finance, economics and actuarial science.

Larry Olton, Group vice president, Integrated Marketing Communications, Guardian Group said the company is always willing to examine investment opportunities and “good assets that fit our strategic outlook and investment profile. Once we have the opportunity to review assets from Clico, we will do so to ascertain strategic fit.”

Olton confirmed that the Central Bank has not communicated with the Guardian group with regard to the sale of Clico’s assets. Asked whether the Guardian Group expressed interest in acquiring any of Clico’s T&T business, Olton said: “The issue does not arise as the Central Bank has not approached us about CLICO.”

Referring to smaller players approaching the company to merge, he said the company had not been approached by any players in the market to merge but the Guardian Group, “is always prepared to take advantage of opportunities as they arise.”

Concerning the impact of oil prices on the company’s products, he said: “Ironically and perhaps interestingly, it has been our experience that insurance sales tend to increase in challenging economic times. Perhaps this is because clients focus more intently on the value of their assets and their income and the risk of a loss in either of them.

“We have however seen some fall off in premium income on the general insurance side, due to cut backs by some of the larger players in the local energy sector. Notwithstanding this, we have been able to achieve growth in premium income.”

Robert Trestrail, executive vice president and general manager for Sagicor Life Inc T&T, said the company has been expressing its interest publicly about the possibility of acquiring Clico’s traditional insurance portfolio. He spoke to Business Guardian in a telephone interview last Friday, to talk about Sagicor’s plans for 2016.

Asked whether CBTT had approached Sagicor to bid for the Clico portfolio, Trestrail said, “No, the Central Bank has not approached Sagicor. As you are aware, the Central Bank recently announced the appointment of actuarial firm, Oliver Wyman as a consultant to assist with the disposal of CLICO's portfolio of traditional insurance business. We are awaiting further details as to how the Central Bank, as advised by its consultants will be proceeding with disposal of the portfolio."

When pressed further as to why Sagicor was interested in acquiring the portfolio, Trestrail said, “At one time, and for many years, Clico was the largest insurance company in T&T and the Caribbean region. As such, that company would have insured the lives of many citizens and developed a significant portfolio of insurance business in the process. We do not know the state of that portfolio at the moment, but it must include many customers who would require their insurance coverage to continue. This represents a role for Sagicor to play as a leading regional insurer, as well as an opportunity to grow its own insurance portfolio in T&T. Once information becomes available we would certainly assess this opportunity with due care."

Trestrail indicated that Sagicor had already participated in resolution of the Clico/British American issue by acquiring the British American portfolio of insurance business in the Eastern Caribbean. He was confident that the successful consolidation of that portfolio with its own would position Sagicor favourably to assume the T&T portfolios of the failed insurance companies.

Referring to what’s new for 2016 in the T&T market, he said that Sagicor intends to offer a range of exciting new products to the market. "We will be celebrating our 175th year in 2016, and we intend to further complement our existing product suite with the addition of new and innovative products that will continue to add value to our clients.” He confirmed that these products will be introduced to the market in a series of launches throughout the course of the year.

Concerning legislation for the financial sector, he said that the Minister of Finance had indicated that the Insurance Act would be one of the first pieces of legislation to go to the Parliament, and Sagicor was well positioned to be fully compliant with the proposed legislation. "We have been very involved with the development of the proposed legislation, and expectantly await the reintroduction of the proposed Bill to Parliament.

Source:
Nadaleen Singh
nadaleen.singh@guardian.co.tt
Business Guardian, BG6
Thursday December 3, 2015