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Financial News

Apr 2004 Financial News

Grace, Guardian to form health insurer

Apr 14, 2004

Grace, Kennedy & Company, and Guardian Life Insurance Company are to jointly form a health insurance firm in Jamaica by mid-year, breathing new competition in a market that has been duopolised by the recent merger of First Life and Life of Jamaica.

The only other health provider is Blue Cross.

"I can confirm that we are having discussions with Guardian Holdings Limited to form a new health insurance company in Jamaica," Don Wehby, the head of Grace's financial services division, told the Business Observer yesterday when questioned about the reports of the impending operation.

However, Wehby cautioned that the project was "subject to further due diligence and approvals, including the FSC". He declined to provide further details.

However, according to Business Observer sources, the go-ahead from the FSC is expected within the next two months because of the June start-up date that has been programmed by the investors.

The project team is said to be working assiduously to fine-tune the information technology system for the new company.
A chief executive officer for the new entity is being sought from a pool of talent that our sources describe as "industry veteran".

Wehby said that the partnership with Guardian was the first in a series that his company planned to forge with other Caribbean companies.

"Grace is very excited about working with our strong
Caribbean partner in this new venture," noted Wehby. "There will be more ventures with strong Caribbean companies."

Prior to the recent merger of Life of Jamaica and First Life, each operated its own health insurance, alongside Blue Cross.

Another company - National Commercial Bank - recently announced plans to start a health insurance company, with those plans now well advanced.

Although Guardian Life had acquired a licence to sell health insurance products when it purchased the assets of the former Mutual Life Insurance Company from Finsac in 2000, that side of its operation never really got off the ground.

Guardian, whose ultimate parent is Guardian Holdings of Trinidad & Tobago, instead focussed on the life insurance segment of the market, growing rapidly to surpass Life of Jamaica to control more than 50 per cent of this market.

Despite one of the partners having earlier secured the licence to offer health insurance, the new joint-venture company was required to apply for a separate licence from the Financial Services Commission.

Like Grace, Kennedy, Guardian is listed both in Jamaica and in T&T, and has been on an aggressive expansion mode - sharing an ambition with Grace, Kennedy to become among the region's leading providers of financial services.

Grace, Kennedy itself recently accelerated its decade-long programme of transforming itself into a financial services-led conglomerate with the merger of its First Global commercial bank with Geroge & Brandy Merchant Bank, and the launch of a series of mutual funds throughout the region. It forged an alliance with one of Canada's largest mutual fund management companies - CI Funds - to introduce its products throughout the region. CI is chaired by Jamaican/Canadian entrepreneur, Raymond Chang.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20040323T190000-0500_57588_OBS_GRACE__GUARDIAN_TO_FORM_HEALTH_INSURER.asp