Mar 2010 Financial News

Sagicor deal triggers review

Mar 12, 2010

Insurance ratings agency AM Best has frowned on the acquisition deal for Sagicor General Insurance (Cayman) Limited, suggesting it could have a potentially negative effect for the buyer.

Sagicor Life Jamaica Limited is selling its 75.25 per cent controlling share in the Cayman general insurance subsidiary to Bahamas First Holdings Limited (BFH), for an undisclosed price, and expects to close the deal this month, after regulatory approval.

The deal has triggered a "review with negative implications" by AM Best of Bahamas First General Insurance Company Limited (BFG) - a subsidiary of BFH - which has an 'A' excellent rating on its financial strength and 'a-' for credit quality.

BFG is the primary holding of BFH, whose businesses span financial services, real estate and other services.

The negative outlook suggests that a downgrade is possible.

The rating agency did not specify its concerns about the deal, but Sagicor Cayman has been a loss-maker for its Jamaica parent over the past two years.

AM Best said the ratings would remain under review until the deal passes its regulatory hurdle and the ratings agency completes an "analysis of the transaction and the effects on both BFG and BFH's ongoing operations and capitalisation."


Source:
business@gleanerjm.com
Jamaica Gleaner
Friday March 12, 2010

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