The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A newly-formed insurer yesterday said it was aiming to ramp up its market presence in early 2015 through the launch of “a full range” of life products, together with disability coverage targeting Bahamian professionals.

David Reynolds, one of New Providence Life Insurance Company’s resident directors, told Tribune Business the underwriter had adopted a “softly, softly”approach to building its market presence since obtaining its licence from the Insurance Commission in late 2013/early 2014.

That gave the Bahamian-domiciled carrier, which inherited a medical portfolio worth $4 million in annual premiums as a platform on which to build, the “green light” to carve out its market niche by targeting segments not covered by the existing, larger life and health insurers.

Mr Reynolds, a well-known Bahamian insurance industry veteran, told Tribune Business: “I guess we’re taking a boutique approach. We haven’t done a launch yet because, even though we’re doing business, our position as a start-up life and health company means there are a number of procedural rules to be followed.

“The life insurance product range is taking time to put together. That’s why we’re having a softly, softly launch. Probably in early 2015, we’ll be looking at a full range of life and health products.”

New Providence Life Insurance Company is majority foreign-owned and capitalised via its principal shareholder, Oklahoma-based AmFirst Insurance Company.

There is, though, local Bahamian equity ownership, with Star General holding a 25 per cent interest and Herbert Thompson, one of its executives, acting as New Providence Life’s president. Apart from Mr Reynolds, the other Bahamian director is accountant Ronald H. Knowles.

The Bahamian life and health insurance market has undergone significant consolidation over the past 14 years, which has left it with just three main local underwriters - BISX-listed Colina Holdings (Bahamas) and FamGuard Corporation, plus BAF Financial.

Some observers will likely be surprised to see a new entrant, and be wondering whether it will be able to compete, and survive, against deep-pocketed rivals.

Mr Reynolds, though, suggested that New Providence Life Insurance Company would use “innovation” for success, pointing out that its independent agent and brokerage sales force were “fairly keen to have some new ideas, some new concepts” to offer.

“One of the main concepts we’re bringing is disability insurance for professional people and middle class working people,” Mr Reynolds told Tribune Business.

While acknowledging that it would take time to build and educate a customer base, he added: “That’s a product we’re bringing to the Bahamas. It will take time to gain acceptance, but there is a lot of acceptance among the professional classes.

“Disability is somewhat of a challenge from a marketing standpoint. People are not used to buying it. Everyone takes like insurance. Bahamians are used to it as a savings plans, and in the past it was their only access to the investment market.

“Now there are more choices in investments, and a lot more term life is written. We’ll certainly be into that.”

New Providence Life Insurance Company will focus its disability insurance coverage on the self-employed, architects, engineers, accountants, physicians and the like - all the professions that will badly need income replacement should the unthinkable occur, as they “depend on their own selves”.

Mr Reynolds, and the company he founded, Morgan White Administrators Bahamas, will be acting as administrators and claims support providers on the ground for New Providence Life Insurance Company.

The latter’s products will be sold through an independent network of agents and brokers, with already features eight companies and a number of individuals.

Reinsurance will be provided through the Lloyd’s of London market, with Mr Reynolds explaining that New Providence Life Insurance Company evolved from the combination of an existing Bahamas-based medical insurance portfolio and the new regulatory regime ushered in by the Insurance Act.

This, he said, meant it was easier to form a Bahamian company to underwrite risk, rather than attempt to do it directly from abroad.

Mr Reynolds also suggested that New Providence Life Insurance Company, as a smaller underwriter, would be able to operate with much lower overheads and expenses than larger, more established Bahamian life and health carriers.

Asked how much market share New Providence Life Insurance Company was projecting to seize, Mr Reynolds replied: “Come back to me in a couple of months.

“It’s going to be extremely modest. We don’t think we will make a dent in the established life insurance market, but we will grow. We have to.”

He added: “We’ve got a very small team. It’s a well-managed organisation. We don’t carry a lot of overheads, and have the benefit of a sophisticated IT system.

“The agents will do the leg work. It’s really a boon for agents. They are able to grow as they have an easy market, and on the medical side there are quite generous commissions. We’re going to get the growth we need.”