June 16, 2010
BCIC, VM Insurance merger on track
The deal to merge British Caribbean Insurance Company (BCIC) and Victoria Mutual Insurance Company (VMIC) has been finalised, with the Matalon-controlled ICD Group now owning 68.5 per cent of the newly created entity.
Victoria Mutual Building Society owns the other 31.5 per cent.
The merger took effect June 1, with a project manager already engaged to integrate both companies.
The terms of the deal were not disclosed.
"The process will include a review of the operations of both companies to determine the scope for rationalisation and improvements in operational effectiveness and efficiency which will ultimately benefit our customers," said Richard Powell, president and chief executive officer of VMBS.
"Until then, both companies will continue to operate as separate entities," he said.
The new company will retain the name BCIC, and be identified in VMBS's structure as an affiliate operation.
The consolidation of operations is subject to approval by the Financial Services Commission, Powell said.
VMIC, a licensed provider of general insurance products and services in Jamaica since 1990, will add approximately $800 million in gross written premium to BCIC's $1.9 billion, making the combined entity the fourth-largest general insurer in Jamaica, according to company executives.
Along with VMIC, VMBS also owns another subsidiary that is licensed as an insurance company in Cayman Islands. This company, Powell said, is not part of the transaction with BCIC.
The merged organisation will be led by BCIC's current chief executive officer, Peter Levy, an insurance executive with 28 years of experience in the industry.
The board of the new entity will be chaired by Joseph M. Matalon, chairman of ICD Group, with Michael McMorris, the deputy chairman VMBS, as vice-chairman. The final composition will have three representatives from VMIC and six from ICD.
VMIC, whose client base in 2004, the most current breakout data available, numbered approximately 12,000 with 50 per cent derived through the society, 33 per cent from brokers and 17 per cent through direct marketing, is currently run by general manager Ian Rowlands.
It was not immediately clear how many staff member would be affected by the merger.
"We have not finalised the optimal organisational structure to best serve the customer so we do not have a target level for the team at this point," said Peter Melhado, president and chief executive officer of the ICD Group.
Together, VMIC and BCIC have about 140 staff members.
VMIC operates out of four locations - Half-Way Tree, Portmore, Montego Bay and Mandeville. But according to the company's website, 70 per cent of its customers are based in the Kingston metropolitan area with the remaining 30 per cent distributed throughout the rest of the island.
BCIC, along with its head office on Duke Street in Kingston, also operate branches in Montego Bay and Ocho Rios.
"The VMIC branches are based within the branches operated by the Victoria Mutual Building Society. While there will be some rationalisation of the current points of distribution of both insurance companies, we expect to continue to use the majority of both entities' branch network," said Powell.
In the meantime, terms and conditions of the VMIC customers' existing insurance policies remains intact.
"They will be treated exactly the same as before, that is, rights and benefits under their existing insurance policies will be fully preserved and protected," said Melhado.