Sat | Sep 26, 2020

NCB to merge life insurance businesses

Published:Sunday | July 5, 2020 | 12:09 AM
Dennis Cohen, Chief Financial Officier and Deputy CEO of NCB Financial Group.
Dennis Cohen, Chief Financial Officier and Deputy CEO of NCB Financial Group.

The NCB Financial Group is awaiting the green light from regulator the Financial Services Commission, FSC, to begin streamlining its insurance arm.

Having taken over large regional insurance conglomerate Guardian Holdings Limited last year, NCB is now looking transfer the insurance and annuities business of NCB Insurance Company, NCBIC, to Kingston-based Guardian Life Limited.

NCBIC will continue to operate as a pension fund administrator and investment manager but will cease to write insurance.

However, NCBIC will still also sell insurance products on behalf of Guardian Life but will do so under a new name, and is, therefore, seeking to be licensed by the FSC as an insurance agent under the Insurance Act. It is also seeking a securities dealer licence under the Securities Act.

Guardian Life is essentially acquiring NCBIC’s insurance operation, but NCB Financial has not put a price on the transaction.

Deputy CEO and Chief Financial Officer of NCB Financial Group Dennis Cohen said that the banking group was not in a position to disclose the finer details of the transaction at this time.

“The transaction will be at arm’s length, the details of which I can’t get into now because there are actuarial considerations,” he told the Financial Gleaner.

“Suffice it to say while there will be a transfer of some assets, Guardian will effectively take on liabilities in taking on the portfolio,” Cohen said.


Cohen would not say the new name to be adopted by NCBIC, explaining that some issues were still being worked through.

“NCB Insurance will assume the role of an agency, selling Guardian’s products exclusively. That will make for a more streamlined, efficient operation that should take the Jamaican operation to another level, thus benefiting our shareholders,” he said.

Head of NCBIC, Vernon James, who was named as the point-man dealing with the transfer and the new arrangements, said that the details were still being worked out around the new organisational structure and designated roles.

“We’re still working out the structure as I drive the process. A lot depends on the FSC, but what is very sure is that we’ll have a stronger, more efficient organisation when we emerge on the other side,” James said.

The insurance contracts being transferred to Guardian Life will be done under their current terms and conditions, said NCB Financial.

The banking conglomerate, in a two-stage transaction, acquired majority ownership, 62 per cent, of Guardian Holdings for a combined $55 billion. The acquisition gave the Jamaican bank access to multiple markets, in the region and the United States, and served to push its asset base to $1.6 trillion.

In Jamaica, NCB picked up a general insurance company, Guardian General, as well as a life insurance company, Guardian Life, which duplicated other holdings already in its portfolio.

Since then, the bank has sold one general insurer, Advantage General, for US$50 million, and is now merging the life insurance businesses in Jamaica.

“Having competing entities within the same group of companies has resulted in missed opportunities to collaborate and leverage economies of experience and scale that could positively benefit each entity’s customers and performance,” NCB Financial Group President and CEO Patrick Hylton said in the statement announcing the NCBIC-Guardian Life transaction.

Guardian Life is the second largest insurance company in Jamaica behind Sagicor Life Jamaica.