A collaborative approach to insurance

Cayman First Insurance Co is the
reincarnation of Sagicor General insurance company, newly acquired by top
Bahamian insurance company Bahamas First. The Journal meets the management of
this recently enhanced local insurance provider and finds out how they intend
to satisfy market demand with an innovative approach.

Patrick Ward, group president and CEO of
Bahamas First, the parent company of Cayman First, has set a high goal for the
Cayman insurance company: to be No. 1 in the market for property, casualty and
health insurance within the next three to five years. An ambitious plan but
attainable, according to Ward.

“Cayman First is almost there already in
terms of market share in these specific areas of the market, at third place. By
employing a similar strategy to the one we used to take Bahamas First from a
US$8.5 million company to a US$100 million plus company in a short space of time,
we believe Cayman First can achieve the top spot in this jurisdiction,” he

Forging strong relationships

Michael Gayle, Senior Vice President at
Cayman First outlines the new approach by his firm to take it to the top: “We
recently held a seminar for around 15 insurance brokers in Cayman, something of
a first for the jurisdiction, to explain our concept of working together,
insurance company and broker, rather than as adversaries,” he explains. “The
event was extremely well received and created the beginnings of strong
relationships with Cayman brokers.”

Ward says this relationship building
process for Cayman insurance brokers and the resulting collaborative approach
means brokers should automatically think of Cayman First when their customers seek

“We want to take price out of the
equation,” he says. “We believe it’s dangerous to simply offer insurance based
on the cost of the premium; instead we hope brokers will offer insurance to
customers based upon a variety of value added propositions.”

Ward believes that clients should not have
to second guess a broker when they offer insurance and that they should know
that Cayman First is the quality option.

A suitable match for the Bahamas…

Ward says the acquisition of Cayman First
was a good fit for his company, a firm hungry for expansion having reached its
capacity in the Bahamas as that jurisdiction’s leading independent property and
casualty insurance company. He says that personal acquaintances had already
been made between the two entities long before the acquisition was made, making
the process a fairly straightforward event.

Bahamas First was attracted to the
infrastructure already in place in Cayman and the similarities between the two
jurisdictions, including the operation of common law and the level of
professionals ancillary to the business, such as lawyers, accountants and
bankers, as well as a stable government, a hard currency market and an
excellent track record in professionalism.

“The regulatory infrastructure in Cayman
was also attractive for us – welcoming but vigorous enough to give a level of
comfort. Cayman ticked all the boxes.”

He does concede, however: “The Cayman
company had a number of reputational issues following Hurricane Ivan in 2004,
but we believed there was sufficient goodwill to sustain its ongoing business
and in particular it had a viable reinsurance programme which added value to
the proposition. All in all we believe that everything was in place to create a
platform from which we could generate the type of return on investment that we
were looking for.”  

…and Cayman

From the Cayman company’s perspective,
Gayle says that they were aware that Sagicor was scaling back on its services
and that new investment would be required. Because of the already well-established
relationship with Bahamas First they were delighted to forge this new alliance.

“In Cayman Sagicor was a quiet,
conservative company that specialised in life insurance, so there was a certain
learning period and therefore constraint for that company as it understood the
broader insurance that we wanted to offer our customers,” he explains. “Now
that we have the new impetus from Bahamas First it gives us a whole new area of
opportunity and we can expand to offer a broader range of services, such as marine
insurance, which we have already provided for a limited number of existing
clients. Travel insurance is another exciting new area for exploration.”

Gayle says the critical mass gained by the
acquisition means that Cayman First is now in a much stronger position when
dealing with reinsurers in an increasingly challenging market.

”There is a core group of reinsurers
committed to the Caribbean provided the price is adequate, However, they are
constantly concerned by the erosion of the base price which means that it is a
challenge to obtain reinsurance each year,” he says.

“I believe that Cayman would struggle on
its own in this respect,” Ward offers.  

Widening the knowledge base

Gayle says that the Cayman firm is also
benefiting from the expertise Bahamas First brings, with management in hand to
help educate individuals in the Cayman firm.

Glen Ritchie, Group CFO of Bahamas First
furthers: “Employees from both firms are enjoying the benefits of
cross-training. For example one individual from Cayman has just spent a week in
the Bahamas in an intensive training exercise.”

Gayle is quick to point out that no jobs
have been made redundant as a result of the acquisition. “He continues, “we
have just employed three new Caymanian employees and another is slated to join
us soon.”

As well as a vigorous round of rebranding
under the new Cayman First logo, the company as an enhancement to existing
services is about to open a new branch in Savannah’s Countryside Shopping
Village, so that customers living in the eastern districts can enjoy the
convenience. This branch will be open until 6 pm and also a half day on
Saturday, for their ease. 

Challenges to the insurance industry, such
as the amendments to the Health Insurance Law will, they say, be met with a
pragmatic approach: “The increase in benefits from CI$25,000 to CI$100,000 will
without a doubt push the premiums up because insurance is created from a pool
of funds and if the pay outs increase then so, too, must the premiums,” Gayle
says. “Never-the-less we will be working to mitigate the impact on consumers as
much as possible to ensure that premiums remain affordable.”

Ward says that their successful strategy
deployed took Bahamas First to the position of second largest overall P&C
Company in the region (second only to the global entity Guardian Insurance) and
largest individual company, and that, with their innovative approach and solid
relationship with brokers, there is no doubt in his mind that Cayman First can
attain the same high level within the Cayman market.


From left: Patrick Ward, Michael Gayle and Glen Ritchie at the Marriott Resort where the broker briefing took place.