The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A newcomer to the Bahamian general insurance industry is expecting to “write in excess of $2 million” worth of business during its first full year, describing the market as “heavily slanted” against consumers.

Vibert Williams, head of Netherlands Antilles General Insurance Company (NAGICO) Bahamas, told Tribune Business the company’s long-term goal was a 10 per cent share of the $350-$400 million property and casualty market.

Speaking after NAGICO (Bahamas) formal launch last Thursday, Mr Williams said that despite efforts by established underwriters to marginalise it, the “start-up” already had seven Bahamian agent/brokers writing business for it.

Disclosing that NAGICO (Bahamas) ultimately wanted to have a 10-strong broker force, Mr Williams said the company’s existing five-strong workforce would likely “double within a year” as its market presence expanded.

Suggesting that it would take 10 years for NAGICO (Bahamas) to hit its market share target, Mr Williams pledged that the Caribbean-based underwriter was in this nation “for the long-term”.

“The business has performed the way we expected it to perform,” Mr Williams said. “We will make our targets for this year, and do so easily.

“We have modest goals for 2013, and are still in start-up mode. We needed to do this formal launch, but expect to write in excess of $2 million in gross written premium for 2013.

“I think for a first year start-up that will be encouraging, and we should see exponential growth thereafter, particularly when we start marketing and branding the company more widely. We’re going to start publicly to get our name out.”

NAGICO (Bahamas) obtained its licence from the Insurance Commission to underwrite business in February 2012, receiving its permits in October. As a result, its first foray into the market was a soft one, something it is now seeking to build upon.

“We want to be conservative but still optimistic,” Mr Williams told Tribune Business. “The market is $400 million, and I think that over time we’re looking to get 10 per cent of that.

“We’re projecting 10 per cent of the market in the long-term, closer to 10 years.Understanding the exposure we face and being cautious about what we do, we will get our share.”

NAGICO has made no secret of its intentions to shake-up the Bahamian property insurance market, and is already regarded by its peers as something of an upstart.

Bahamas First earlier this year pledged to defend its market share and portfolio against what it described as NAGICO’s aggressive discounting tactics, alleging that it was undercutting established insurers by up to 20 per cent on homeowners pricing.

Describing such claims as only half the story, Mr Williams told this newspaper: “Our competitors had expected us to come in here and try to turn the market on its head. That’s so far from the truth

“We bring a different view, and this thing about cutting premiums 15-20 per cent, it’s not entirely true. We can lower a premium, but raise a deductible or apply a limit.

“The opposition does not see how we structure a policy. They see my rate and say we’re cutting 20 per cent, without seeing the structure and understanding the strategy behind the pricing.”

And the NAGICO (Bahamas) boss added: “The competition, the competitors say and do things to make it more difficult. This is my fourth country in three years, third market in three years, and everywhere we go the competition say what they want to say to scare us away, but it never works.

“Our balance sheet is better than most, our solvency ratio is better than most, our profitability is better than most, and our strategy is second to none.”

Mr Williams told Tribune Business that in time “we’ll show you how the industry here is slanted so heavily against the insureds, the current structure of the market works against the insureds”. He did not elaborate, and some are likely to view his unsubstantiated comments as merely a bid to win business.

The Bahamian property and casualty market previously consisted of five locally-based underwriters. Apart from Bahamas First, there is RoyalStar Assurance, Security & General, Insurance Company of the Bahamas and Summit Insurance Company. The latter two are effectively ‘tied carriers’ through which J. S. Johnson and Insurance Management, respectively, place their general insurance business.

NAGICO, though, has a lower rating from A. M. Best, the global insurance industry’s rating agency, than its rival Bahamian property and casualty insurers. The likes of Bahamas First and RoyalStar Assurance have ‘A- ratings, while NAGICO’s is ‘B++’.

However, NAGICO has been on a general expansion drive in the Caribbean over the past four years, the Bahamas being the latest territory it has entered.

Mr Williams said the underwriter’s main goal when it came to expansion was to spread out and diversify its risk exposure, ensuring it was not susceptible to catastrophic events such as hurricanes.

And, in the case of the Bahamas, this nation has the ‘highest concentration of property” risk in the region, standing at between $350-$400 million in gross written premium.

“It’s a very attractive market and can be lucrative,” Mr Williams told Tribune Business. “It’s also a very exposed market, so must be treated with a lot of technical skill and respect, but our reinsurers are more than capable of underwriting whatever we insure.”

Seventy per cent of the way towards developing a 10-strong intermediary sales/distribution force, he added: “We’d like to have a fairy small group of representatives that we can support 100 per cent, rather than spread ourselves too thin trying to be all things to all people.

“The market has had some difficulties with agents and finances and things, and we want to avoid that.”

Emphasising that NAGICO (Bahamas) was seeking to “double” its five-strong Bahamian staff complement from five to 10 within a year, depending on growth rates, Mr Williams pledged: “We will be here for the long-term.”

NAGICO operates in 16 Caribbean territories, and takes in a collective $115 million in premium income annually.