BF&M and Argus to merge and form new insurance company
Insurance companies BF&M and Argus are to merge after signing a definitive amalgamation agreement.
The move was announced in a statement this morning and is still subject to regulatory and shareholder approvals.
The statement said that there was a planned completion date for the merger in the fourth quarter of this year.
Abigail Clifford, group president and chief executive of BF&M, said: “We are thrilled to announce an agreement to form a new insurance company with tremendous talent, superior products, additional resources, unmatched dedication to customer service, and the ability to deliver stronger returns to shareholders.
“This proposed combination would meaningfully accelerate our progress across BF&M’s three strategic pillars — growth, efficiency and service — and better position both organisations to navigate the rapidly evolving insurance landscape as one unified enterprise.”
She added: “I would like to express my deepest appreciation to the entire BF&M team for their extraordinary efforts to reach this milestone.
“We look forward to the prospect of working with new colleagues from Argus to achieve our collective ambitious vision, exceed the expectations of our customers and partners, and create enhanced value for all stakeholders.”
“The Ministry of Health acknowledges the announcement of the merger between BF&M and Argus, two of Bermuda's leading insurance providers as well as the concern from the public on how this could negatively impact their household budgets.
“While recognising the potential benefits on the global stage, the ministry emphasises the importance of keeping the cost of healthcare down for Bermudian families.
“The Ministry of Health understands the anxieties raised by the proposed merger of BF&M and Argus, particularly in light of the recent reports of increases in local health insurance premiums by private insurers despite the Government doing our part by freezing the Standard Premium Benefit for the past three years.
“We understand the concerns of Bermudians who are worried about the affordability and accessibility of healthcare, and we want to assure the public that introducing universal healthcare coverage and driving down the cost of healthcare are at the core of our vision and the work we are doing in the Ministry of Health.
“We hear the voices of Bermudians struggling to keep up with rising premiums. We share their concerns about the impact of healthcare costs on their ability to live, raise families, and retire in Bermuda. That is why the Government is committed to launching universal healthcare coverage.
“The Ministry of Health remains steadfast in its commitment to ensuring that healthcare in Bermuda is affordable, accessible and sustainable for all residents.
“We will closely monitor the merger process to safeguard the interests of the public, particularly those who rely on publicly funded health insurance.”
Its key concerns and expectations regarding the merger, include:
• No increase in premiums: The ministry seeks assurance that the merger will not result in increased premiums for individuals and families
• Continued availability of services: The ministry expects that the full range of healthcare services will remain accessible and uninterrupted throughout the transition
• The ministry is interested in understanding how the merged entity plans to support the implementation of universal healthcare in Bermuda
• The ministry seeks to ensure that individuals with publicly funded health insurance plans are not adversely affected by the merger
The statement added: “The Ministry of Health looks forward to ongoing dialogue with BF&M and Argus. The ministry is committed to working collaboratively with all stakeholders to ensure a smooth transition that prioritises the health and wellbeing of the Bermuda community.”
Argus chief executive Alison Hill, said: “Our strategy has always been to grow our business so that we can better leverage scale and buying power for the benefit of our customers and community.
“I am incredibly proud of the progress that we have made over the last 15 years to transform Argus. We have diversified our business lines, grown our markets and delivered impressive shareholder value.
“I am therefore delighted that this transformation is culminating in the formation of a Bermudian insurance champion to serve the people of Bermuda and our other international communities.
“I would like to take the opportunity to thank my incredible colleagues for all playing their part in driving to make this combination a reality and ensuring that the enlarged group is well placed to continue to thrive in the future.”
There was no mention on whether there would be any job losses or where the new company would be based.
Under the terms of the agreement, Argus will amalgamate with Eleos Health Ltd, a wholly owned subsidiary of BF&M, with Argus shareholders receiving 0.251 BF&M common shares for each Argus share that they hold.
Following the closing of the transaction, BF&M shareholders will own approximately 60 per cent and Argus shareholders will own approximately 40 per cent of the combined group.
The BF&M common shares will continue to be listed on the Bermuda Stock Exchange. The Argus shares will be delisted upon completion of the amalgamation.
Specifically, it is expected that the amalgamation will result in the following strategic and financial benefits:
• Enhanced portfolio of businesses across Property and Casualty, Life, Health and Pensions
• Greater scale in healthcare to help mitigate rapidly rising costs in Bermuda
• Expanded geographic reach with established and well-recognised brands across Bermuda, the Caribbean, Gibraltar and Malta
• Greater ability to invest in an enhanced digital offering for our customers and partners
• Complementary work cultures with a shared ambition to capitalise on exciting growth opportunities, drive operational excellence and deliver outstanding customer service
• Strong commitment to Bermuda and to supporting local talent development
Expected financial benefits:
• Higher-quality earnings profile driven by enhanced portfolio diversification
• Efficiency opportunities across combined operations and underwriting
• Strong capitalisation and financial strength ratings which provide flexibility to support future strategic initiatives, sustainable growth and an attractive dividend to shareholders
According to the statement, the boards of directors of both Argus and BF&M unanimously approved the amalgamation.
It added: “The boards of directors of both companies believe the transaction represents a compelling opportunity to create a stronger, more efficient and more diversified group.
“The proposed amalgamation brings together two Bermudian insurers with complementary expertise, product lines and geographic footprints.”
Following completion of the amalgamation, BF&M’s board of directors will consist of ten directors: six current BF&M directors, Abigail Clifford, Anthony Joaquin, Conor O’Dea, Gordon Henderson, Andrew Lo and Paul Markey, and four current Argus directors, David Brown, Barclay Simmons, Costas Miranthis and Kim Wilkerson.
Mr Joaquin, who currently serves as chairman of BF&M, will serve as the chairman of the combined group.
Following closing, Ms Clifford, CEO of BF&M, will be chief executive of the combined group and Peter Dunkerley, CFO and deputy CEO of Argus, will become chief financial officer of the combined group.
There was no information on what would happen to current Argus CEO Ms Hill.
The remaining executive leadership team for the combined group will comprise “highly experienced leaders” from both companies.
Mr Joaquin said: “This combination is the result of significant efforts by both companies to enhance scale, diversification, resilience and returns for shareholders.
“We have a world-class leadership team drawing from both companies, and the BF&M board of directors is confident this new company will be uniquely capable of successfully navigating a highly dynamic operating environment and leading the future growth of the Bermuda insurance market.”
David Brown, the chairman of Argus, added: “This is the right time to bring together two historic Bermudian businesses to improve the breadth of products and services offered to the island of Bermuda and the international communities we serve.
“The Argus board of directors strongly believes this transaction is the right step to deliver enhanced value creation for all stakeholders.”
The combined company will be renamed in due course.
• To read the full statement, see Related Media
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