SAGICOR Life Jamaica (SLJ) has sold its general insurance portfolio in the Cayman Islands to Bahamas First Holdings following a $395-million loss from its operations in 2009, but its life portfolio remains.

Sagicor, which is ultimately Barbadian-owned, stated that the general insurance industry in Cayman no longer offered attractive prospects for the group.

“This decision was taken by SLJ as its investment in the property and casualty insurance business in Cayman was no longer considered as offering sufficient strategic value at this time,” stated the company in a release to the Jamaica Stock Exchange yesterday. “SLJ will, however, continue to operate its life insurance portfolio in that territory through its wholly owned subsidiary, Sagicor Life of the Cayman Islands Limited.”

The agreement became effective January 1, 2010 but is subject to regulatory approval.

SLJ controlled 75 per cent of the general insurance division in Cayman.

The Cayman operations recorded revenues of $4.2 billion which was 71 per cent more than the previous year; whilst its total assets increased some 60 per cent to $26.2 billion in 2009 versus $16.4 billion in 2008.

It was not made clear what percentage of the assets was associated with the general insurance side of the business, except that SLJ reported that its general insurance segment overall made a loss of $27 million in 2009 compared with net profit of $29 million the year before and held assets of $5 billion at the end of December 31, 2009.

SLJ recorded group net profit of $4.4 billion for its year end December 31, up 12 per cent over 2008.

In 2005, a year after Hurricane Ivan, Sagicor Life of the Cayman Islands (SLC), acquired a 51 per cent stake in Sagicor General Insurance Cayman Ltd (SGC) (formerly Cayman General Insurance Ltd) from Cayman National Corporation. On October 22, 2007, SLC purchased an additional 24.2 per cent interest in SGC from CNC. Under the terms of the initial Sale and Purchase Agreement,

CNC provided certain warranties to SLC including claims in relation to Hurricane Ivan, not finally settled. SGC filed suit in February 2006 against certain third parties to recover sums paid for work done in respect of Hurricane Ivan (the “Windsor Village litigation”). The understanding of the parties (SLC and CNC) based on discussions held was that CNC would be entitled to retain any benefits realised from the Windsor Village litigation and as a consequence that CNC would be responsible for all liabilities that might arise from it; CNC has also been responsible for the conduct of the litigation.

In December 2008, SGC withdrew its claims against the third parties and the third parties have now lodged counterclaims against it. Although SGC is confident in defending its positions on these counterclaims, certain contingent liabilities could attach if the courts rule in favour of the third parties or if out-of-court settlements were to be negotiated and if CNC seeks to deny responsibility for any of these counterclaims. The amounts can not be quantified at this stage.

Sagicor also expanded its life insurance business in Cayman through acquisitions.

In February last year, Sagicor Life of the Cayman Islands acquired the Cayman Individual Life portfolio of Guardian Life Limited and in January 2008, Sagicor Life of the Cayman Islands, acquired the insurance portfolio of former Cayman Islands Individual Life business of Industrial Alliance Insurance and Financial Services Inc from Sagicor Capital Life Insurance Company Limited.