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ICD to buy VM Insurance

Published:Wednesday | March 24, 2010 | 12:00 AM
Joseph Matalon, president/CEO of ICD Group and chairman of BCIC. - File
Richard Powell, president and chief executive officer of Victoria Mutual Building Society, had no comment. - File

The ICD Group is in negotiations with Victoria Mutual Building Society to buy its insurance subsidiary, but the Matalon-owned company said it would divulge no details of the transaction before a deal is struck.

The talks are being handled by ICD, but informed insurance sources say the group's subsidiary, British Caribbean Insurance Company, will likely end up as the acquisition vehicle.

"Negotiations are still ongoing, we can't say anything more, but we expect to make an announcement come April," Joseph Matalon, president and chief executive officer of ICD Group, told Wednesday Business.

Victoria Mutual Insurance Company Limited (VMIC) operates in Jamaica and the Cayman Islands, but it was unclear whether the deal spanned the business in both countries. The subsidiary, whose Jamaican offices are ensconced within the VMBS branch network, started up in 1990, and was, up to 2008 - the most current data published by VMBS - a profitable entity, contributing $109 million in net profit to the group, doubling 2007's outrun of $56 million.

Its 2008 profits amounted to one-seventh of group surplus of $743 million.

It operates in the motor, property and casualty markets, as well as other segments of the general insurance market.

Well-placed sources said VMIC staff was alerted to the transaction more than a month ago, suggesting that the parties were sufficiently advanced on negotiations to disclose the pending sale.

Matalon noted that the terms of agreement were still being worked out.

Richard Powell, president and chief executive officer of the Victoria Mutual group, was unable to speak on the deal.

The company, whose core business is mortgages, later said it would not comment on the transaction as there was nothing definitive to say.

The ICD Group was established over 40 years ago by the Matalon family, evolving into a trading and manufacturing conglomerate. Itscurrent businesses include property and construction firm WIHCON, general insurer BCIC and insurance brokerage CGM Gallagher.

BCIC has long been in acquisition mode. Its last attempt to merge with NEM Insurance Company faltered because of what then managing director Leslie Chung said were regulatory concerns.

But three years ago Chung, who has since been replaced by Peter Levy, said BCIC was not giving up on plans to either acquire or merge with other players. The general insurance market up to June 2009 had 11 players managing assets of $13 billion.

Chung is now deputy chairman of BCIC, while Matalon is chairman.

VMIC in 2004 had 12,000 clients, 50 per cent of which were channelled through the Society, according to disclosures on its website.

VMBS and ICD are already partners. In late 2008, the mortgage company acquired 20 per cent of ICD-controlled Prime Asset Management, a pension funds manager.