By Sasha Harrinanan Thursday, January 26 2012

Regional insurance giant, Nagico Group of Companies, has officially entered the local market through its acquisition of GTM Insurance Company Limited (GTM).

Group CEO, Imran McSood-Amjad, said Nagico intends to turn the mid-sized, 103-year-old company into one of the leading insurance companies in Trinidad and Tobago. GTM’s trading name is now GTM/Nagico Insurances. A new sign has already been hung outside the company’s headquarters at 95 - 97 Queen Street, Port-of-Spain.

“If you are a big insurance player in the Caribbean, which we are — Nagico operates in 16 territories in the Dutch, French and English Caribbean, you cannot ignore the Trinidad market. So when we heard that GTM Trinidad was up for sale, I was naturally interested because I was familiar with its sound business practices, having started my career more than 30 years ago at GTM Guyana,” McSood-Amjad said.

Nagico Group’s chief executive was speaking to Business Day at the official acquisition announcement and “grand champagne evening” held last Friday at the TT Chamber of Industry and Commerce building in Westmoorings.

McSood-Amjad co-founded Nagico in St Maarten on February 1, 1982 with a small group of fellow businessmen. The company has since become the largest privately-owned insurer in the region, due in large part to its on-going expansion drive, providing a range of policies including home, marine, liability and airport insurance.

Almost a year ago, February 2011, the company entered the St Lucia market. About the same time, Nagico began negotiations to enter TT. This was followed last September by formal approval from the Central Bank of TT to buy-out GTM.

“To finalise the purchase of a financial institution in Trinidad and Tobago, you have to get approval from the Central Bank. That took time because they had to do due diligence on Nagico, our management, our financials. They went through us with a fine tooth comb, as the saying goes.

Final approval came in September 2011 and we made the payment and purchase one month later,” McSood-Amjad said.

Although McSood-Amjad would not say how much Nagico actually paid for GTM, he did reveal the company planned to invest a significant amount of money to upgrade GTM’s infrastructure.

“In the end it will cost Nagico US $10 million. That’s the total of what we paid for GTM Trinidad plus what we will have to add in terms of building renovations, equipment upgrades and hiring new staff. The purchase price accounted for more than 90 percent of that US $10 million,” McSood-Amjad stated.

Now that Nagico Group has entered the local market, it is preparing to do the same in the Bahamas as it has obtained an insurance license to operate there and expects to open this April.

The insurance giant has also ventured into new policy territory, having acquired British American Insurance Company (BAT)’s life insurance portfolio in the Dutch Caribbean.

“In 2012 Nagico expects fairly rapid growth, that our total Group premium income will be more than US $100 million, including GTM. We have gotten into life insurance now because we bought British American’s life portfolio in the Dutch Caribbean. We chose to do that because we understand the Dutch Caribbean market and because BAT was far more regulated there than elsewhere in the region. As such, it was an easier financial decision, our due diligence was much more straightforward and easier to do. We were able to complete that in a relatively short time,” McSood-Amjad noted.

NAGICO’s projected sales for 2011 were US $95 million, its capital was projected to be US $70 million while total assets were projected at US $115 million.

What does this mean for the new GTM/NAGICO Insurances?

General manager Christopher Henriques, who was appointed to the post January 1, 2011, said the company can now underwrite much larger risks.

“Last December, a broker came to us and asked how much we could underwrite for a company in the hotel and tourism sector. I said $100 million and he asked if I was serious. When I said ‘yes’ the broker asked if we had reinsurance for that and I invited him to come and see the treaties at our head office. You know how much we wrote the year before (2010) in that sector? TT $6 million.

“Prior to the buyout the biggest risk we could write was $18 million but now we can write $120 million on any one risk. That’s a huge difference and all because GTM is now part of one of the largest insurance companies in the Caribbean,” Henriques noted.

This expansion plan will see GTM/NAGICO Insurances offering new products, either later this year or early 2012. Namely, marine, aviation, products liability insurance, which Henriques said GTM didn’t do much in the past because of the amount of exposure it entailed.

All of this would require more staff, not less. This putting the rest concerns about staff retrenchment.

“We’re looking to hire at least six people right now in administration and management, then as GTM grows we will hire more agents too. We’ve already brought in one management person from NAGICO, Roger Balkissoon, who is originally from Trinidad. He is the new Assistant General Manager at GTM, having served previously as NAGICO’s regional manager for Product Development,” McSood-Amjad said.

In order for GTM/Nagico Insurances to become a leading company in its sector, its physical infrastructure requires an overhaul, as explained to Business Day by Henriques.

“One of the first things we’re doing is totally refurbishing our headquarters for around US $ 1 million. That building is more than 50 years old, our computers need to be replaced and our data entry system has to be updated. While this is going on floor-by-floor, the staff, myself included, will have to ‘squeeze up’ because our technology is there and it would far more problematic to move out completely,” Henriques explained.

The refurbishment work is scheduled to start by mid-March and take six to eight months to complete. Henriques said once that is done, GTM/Nagico Insurances will do the same with its Coffee Street, San Fernando office, also for an estimated US$1 million. The company’s Chaguanas office will be relocated but this will require much less money, Henriques explained, because “all we’re really going to need is some new furniture and equipment. The timeline on that project hasn’t been confirmed yet though.”

Henriques said the physical inconvenience would be made bearable by the family-friendly spirit within GTM/Nagico Insurances and its parent company, Nagico Group.

“One of the synergies of this acquisition is that both companies are very people-oriented, with staff, with brokers and of course with our customers. For example, Mac (McSood-Amjad) wanted to visit our Point Fortin branches during this visit because that’s where our biggest customer base is located but his schedule was so packed that we didn’t have time to go. But Mac said ‘next trip I have to reach Point Fortin’.

“Another sign of the camaraderie at GTM is the number of long-time employees. The average person has been there for 20 years while the new Underwriting manager has been with GTM for 33 years. The company believes in promoting from within first but we hire new staff as needed,” Henriques said.

New staff, upgraded infrastructure and new policies are not the only changes being made at GTM/Nagico Insurances. Henriques said for the first time, the company will also have an online presence and eventually, online payment options for customers.

“Nagico Group is in the process of developing a whole new web site and each territory in which it operates will be brought on one-by-one. I believe by the end of the June this year, the GTM web page will be operational,” Henriques stated.