The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

NUA Insurance Agents and Brokers yesterday said it had added 3,000 policies, and between $1.5-$2 million in annual written premium, to its business book by acquiring a portfolio held by one of its Eleuthera sub-agents.

The 100 per cent-owned Bahamas First subsidiary added that the purchase of the Joshua Culmer Insurance Agency portfolio would lead to the opening of its first NUA service centre in Palmetto Point, its fifth such office in the Bahamas.

And, indicating that NUA remained on the hunt for agency/brokerage acquisitions, Warren Rolle, its managing director, told Tribune Business that a “saturated market” meant this was an easier expansion route than trying to increase market share via organic growth.

Disclosing that the Joshua Culmer acquisition meant that NUA would now employ two staff at its Palmetto Point centre, when it opens on September 24, 2012, Mr Rolle said the agency would “potentially” also have an employee in north Eleuthera.

And, while NUA had acquired his existing portfolio, Mr Rolle said Mr Culmer would remain as one of its three Eleuthera sub-agents. Mr Culmer will focus on generating new general insurance business from his existing office, with the NUA service centre operating from the same shopping complex.

Explaining that the acquisition suited both parties, Mr Rolle said: “Joshua Culmer has ben a sub-agent of ours for more than 30 years, and he indicated to us it’s really time for him to sort of remove himself from the day-to-day operations of a sub-agent as he’s got on in years.

“He’s represented NUA throughout the island, and he’s still going to serve a very important role for us. Palmetto Point seemed a natural fit for a base to set up our operation, as his customers often used to go there for service.”

Mr Rolle confirmed to Tribune Business that the portfolio NUA was acquiring contained “between $1.5 million to $2 million in written premium”, was “approximately 3,000” policies large.

“Some of the policies are very small in terms of the motor side, but it’s a very significant amount of business,” he added.

The Joshua Culmer deal, together with other recent acquisitions such as the Bethel-Thompson portfolio, had taken NUA’s total annual written premium to “about $50 million”, Mr Rolle confirmed. NUA only writes business for Bahamas First.

Noting that areas such as Harbour Island, Rock Sound and Windermere contained assets requiring significant insurance protection, Mr Rolle said of Eleuthera: “It’s a very important part of our business.

“They produce quite a bit of premium for us, and we have had a very solid relationship with the residents there for some time. It’s not just the locals, but the second homeowners, the foreigners, who are very important to us.”

The NUA managing director told Tribune Business that the agency remained open to further acquisition opportunities as and when they arise, provided they were a good fit for its business model and made sense.

He added that the new Insurance Act and regulations, which imposed more stringent capital, audit and regulatory requirements on agents and brokers, was likely to continue driving consolidation in this segment of the Bahamian insurance market.

“We’re continuing to look at opportunities as and when they arise,” Mr Rolle said. “We haven’t actually passed any further acquisitions, but opportunities come up from time to time.

“There are more stringent requirements imposed by the new Act and regulations, which some agents will find it difficult to meet or comply with. This may drive more mergers and acquisitions.

“We are extremely well placed. We ourselves have met all requirements under the Act, and are very familiar with what is needed to satisfy the regulators. We’re quite prepared to take on advantages that may arise if other agents are unable to meet the requirements.”

Asked whether consolidation was already occurring in the Bahamian agent/broker market, Mr Rolle told Tribune Business: “We see it every day.

“The market’s somewhat saturated. This may be a good thing in some respects. In this market, because it is so saturated, it’s difficult to achieve any organic growth. You have to look at other ways to grow revenue streams, and acquisition is one of those ways.”

NUA now has five offices, with three on New Providence and one in Georgetown, Exuma. It has sub-agents on Long Island, Abaco and Andros, and manages the GBA (Freeport) office.