CGI Open For New Investors

Chris Gunby, Godfrey Meghoo, Stuart Dack, Eric
Crutchley and Ormond Williams at CNC shareholders
meeting.

Shareholders Linford and Sharon Pierson, Benson
Ebanks and Arthur Hunter.

CNC shareholders meeting included: Peter Tomkins,
Director, Stuart Dack, CEO and Director, Benson
Ebanks, Chairman of the Board of Directors, Truman
Bodden, Deputy Chairman and Clarence Flowers,
Director.

Friday,  July  1, 2005

Cayman National Corporation (CNC) is now negotiating with five foreign insurance companies in addition to Sagicor to sell a portion of Cayman General Insurance (CGI). Negotiations with Sagicor, a Barbados-based insurance company, have been ongoing for at least four months for 51 percent of the firm, which would change it to a primarily foreign-owned enterprise if the sale was to go through.

Since however, the negotiations have been going on for such an extensive period, CNC is now entertaining proposals from five other insurance companies, according to CEO Stuart Dack.

At a shareholders meeting held on 28 June the CEO told the audience about the corporation’s latest move over the future of the insurance arm.

“Because negotiations with Sagicor were taking a long time we have started to enter negotiations with other insurance companies,” said Mr Dack. “And since trading has been so strong for the Group for the first half year, we don’t need to pursue a rapid transaction.

We have a broad need for insurance products so we want to partner with a company that give us an opportunity going forward. In the next few weeks we should have a clear idea of which company we will be partnering with.”

Mr Dack added that negotiations with each of the five other insurance companies involved different requirements; consequently, a deal with another company does not mean 51 percent ownership.

One reason why negotiations may have slowed down is Sagicor has just purchased the American Life Insurance Company for US$58 million.

CNC also announced Group profits of CI$8.1 million for the half year to 31 March, a 60 percent increase from March of 2004. Other financial performance indicators reported a 19 percent increase of total income to $22.7 million and total deposits up seven percent at $699 million as well as total assets exceeding a new benchmark of US$1 billion.

In addition, a ten cent dividend was approved for the 2003/2004 financial year.

Mr Dack explained that the financial performance was exceptional in light of the economic impact on CGI from Hurricane Ivan.

“A significant task faced by CGI was accurately quantifying the level of claims and potential loss and with more than 2000 motor and property claims logged, the logistics of the exercise were daunting, particularly with the available loss adjusters at full stretch.”

He explained that approximately 92 percent of the claims have been settled from Ivan.

“The impact on this reserve upon the balance sheet of CGI is that a net injection of CI$41 million is required to cover the deficit created by Ivan claims,” he said.

Mr Dack said the $41 million in capital will be funded with $30 million in CNC’s capital reserves with the balance funded by the sale of CGI stock to another insurance company.

Another issue addressed at the meeting was the writ for $800,000 for outstanding claims by the Healthcare Services Authority (HSA), which is being contested by CGI.

“We have checked our records and there are no outstanding sums due to the HSA.

“The Authority has some work to do to put its house in order, which lies with its own accounting system.”

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