Joseph M Matalon, (right) chairman of CMG Group, greets William Tomlin, chief operating officer, at the press briefing on Wednesday to announce the launch of the CGM Group. The new regional insurance intermediary comprises International Insurance Brokers (IIB), Jamaica, CGM Insurance Brokers, Barbados, and IIBRe, the re-insurance division based in Jamaica. At centre is CEO and business director of the CGM Group, Matthew Pragnell.

The merger of the Matalon-owned International Insurance Brokers Limited (IIB) and CGM Insurance Brokers (CGM) of Barbados, will, according to the owners, create a brokerage house that will be a major player across the Caribbean.

The enlarged entity which will trade under the CGM brand, is expected to generate premium of US$75 million (J$4.5-b) this year. The capital base is US$3 million.

At the formal launch of the company on Wednesday, the chairman, Joseph M Matalon declared that the size of the combined entity would give it a strategic advantage in the region.

"What we now have with the CGM Group is an intermediary that can leverage its financial strength and regional knowledge to the benefit of our customers throughout the Caribbean," Matalon told participants at the launch, at the Courtleigh Hotel in Kingston. The size, he added would "command the attention of the international insurance markets as well as the continued support of our vital domestic carriers".

With about US$32 million in annual premium, the Barbados based CGM controls an estimated 30 per cent of the business in that market and has operations in St Lucia and soon, St Vincent. IIB on the other hand operates only in Jamaica where it controls an estimated 20 per cent of the market with an annual premium of about US$37 million.
But Matalon told the Observer that the group, post merger, had the potential to write much more business.

"Right now both of us are writing US$75 million in premiums and we plan to double that in five years to US$150 million," he said, adding that the merged entity would "generate economies, have a much larger talent pool" and would cater to clients seeking "the best services from people who have a superior level of local knowledge".

The combined entity has a staff complement of 110.
Under the new structure the owners of both companies will hold shares in a holding firm called CGM Group, which will be the parent of the operations in the various jurisdictions.

Matalon said that both IIB and CGM would retain their names in their core markets, having already built up significant goodwill in those names. However, they will operate under the overall banner of the CGM Group, given the penetration of the CGM name over a fairly wide geographical area within the region.

He argued that the regional insurance brokerage was timely as "a number of our commercial clients are expanding their business regionally and there is a real need to have a Caribbean (insurance) programme to manage your risk transfer, asset exposure, group health and life". Such a programme, he noted, would result in significant savings for commercial clients.

"The larger the book of business that we can bring to the table, the more negotiating leverage we are going to get with our re-insurers," said Matalon. "We hope to be able to compound that importance as we expand to other islands."

CGM Group is already negotiating with potential partners in The Bahamas, Trinidad & Tobago and St. Vincent. "We plan to add a new island every year" said Matalon who expects the first partnership to be effected in St. Vincent.

The Barbadian partner is already the broker for most of the major hotels, much of the sugar industry, and five utility companies in the Eastern Caribbean and Guyana.

The merged entity will be run by a group chief executive officer, Matthew Pragnell, who told journalists on Wednesday that the combined resources would provide the critical mass that would enable the CGM to compete with the traditional global broking houses from Europe and North America that scout the region for business.

"The emergence of the company as part of the CGM Group is a further exciting step for all the IIB family, and one which I wholeheartedly endorse as the best way forward for us in the Caricom Single Market and Economy," said Pragnell.

Pragnell who founded CGM Insurance Brokers noted that CGM now handled the business of the "majority of the group employee plans in the Eastern Caribbean".

William Tomlin, the president of CGM and newly appointed chief operations officer for the merged group, stressed the importance of the shared corporate culture to the success of the merger.

"CGM and IIB are an excellent fit," he declared. "We both share the same values and a commitment to exceed our customer's expectations, using the most advanced risk management and risk transfer techniques available. The economies and efficiencies will benefit our shareholders, employees and clients."

The combined entity will offer comprehensive benefits, insurance and risk management services to domestic and regional markets.

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