Zenith sells remaining portfolios to Orion, Spectrum
Published:Friday | May 7, 2010 | 12:00 AM
Sabrina Gordon, Business Reporter
Zenith Insurance Brokers Limited has now sold off its personal-line insurance business, completing the divestment of its entire portfolio and paving the way for the 26-year-old insurance brokerage to be wound up.
The CGM Gallagher Group acquired the commercial portfolio a month ago.
"We will maintain our identity as we begin the run-off now, in terms of payables and receivables, to eventually wind up the company, but we are not close to doing it, as it will take a little time," said James Pawson, Zenith's managing director.
Zenith, in a newspaper notice on Friday, said that it had concluded negotiations for the sale of its personal- and commercial-line portfolio. The deals on the individual policies, which Zenith previously said were worth J$160 million in premium income, closed May 1.
The insurance brokerage - whose shareholders include Chairman Oliver Jones and Lascelles Chin, who each own 27.5 per cent; and Pawson, Gordon Sharpe and the Wisynco Group of Companies, each with 15 per cent - has not disclosed how much it made from the sales.
According to Pawson, two thirds of the personal-line business was sold to Orion Insurance Brokers; and the other third to Spectrum Insurance Brokers.
"We are always looking for opportunities to acquire new business or expand portfolio, and as long as that increase in revenue will increase profitability, we will always be doing that," said Ewart Scott, managing director of Spectrum Insurance.
"The opportunity to acquire the personal lines of Zenith fits in line with the company's plan to expand our network; to build the business and expand the services we offer to our voluntary benefits clients such as police, soldiers, nurses, correctional officers, teachers and firemen," said Blondell Wilson Henry, general manager of Orion Insurance.
"And, of course, expect that the acquisition will be profitable for us."
Zenith first sold its commercial line in April to CGM Gallagher, a deal that saw its Montego Bay office taken over and is being rebranded under the CGM name.
Orion's Star rising
The personal-line business from that branch was taken over by Orion's Montego Bay operation.
Orion's acquisition of Zenith Ocho Rios brings its branch network to seven; the other six being Spanish Town, Linstead, Morant Bay, Montego Bay, an expanded Mandeville operation, along with its Kingston headquarters.
Orion, which commenced operation in 1996, now employs approximately 50 staff.
"We did not previously operate in Ocho Rios, and so the north coast was not properly served. This acquisition enables us to have a meaningful presence there," said Wilson Henry.
Neither Scott nor Wilson Henry was willing to disclose the acquisition cost.
"While not quoting the value, the addition is meaningful," said Wilson Henry.
Scott said the business added less than 10 per cent to Spectrum's more than $100 million worth of commission income earned on a yearly basis.
Further, Scott noted that Spectrum acquired only policies that are up for renewal.
"The purchase is based on what is renewed. As the policies come up for renewal, then those will come on Spectrum's books, and is what we will pay for," he said.
"Those already renewed, say, from January, we will only manage the claims."
Spectrum operates out of two locations, Kingston and Mandeville, employing approximately 40 full-time staff members, along with 30 independent contractors.
Both Orion and Spectrum broker insurance coverage for accidents, liability, marine, aviation and transport, motor vehicle, pecuniary or monetary loss, property, as well as health.