But an official at Colina told the Bahama Journal that such concerns are unfounded and probably even mischievous.
Colina insurance has garnished a huge chunk of the insurance market within the last 12 months creating a serious competitive imbalance, according to industry insiders.
While authorities today remain tight-lipped about the proposed purchase, executives at various companies contacted by the Bahama Journal are urging the government to step in and preserve the economic vitality of the industry.
Minister of Financial Services and Investments Allyson Maynard-Gibson said only that she was unaware that Colina was attempting to purchase yet another company.
Early this year, officials of the insurance company announced that they had acquired Global Life Assurance Bahamas Ltd., making Colina the largest insurance company in The Bahamas with over $175 million in assets.
Colina officials reported at the time that the new company had over $175 million in assets; over $55 million in total revenues; a capital base in excess of $35 million; an in force base of over 43,000 policies and over $2.5 billion in life insurance.
Just last month, Canada Life Assurance Company announced that it had reached an agreement with Colina whereby Canada Life will sell its Bahamian and Cayman Islands life and health insurance business to Colina.
An executive at Colina, who spoke on condition of anonymity, said the company is now looking to purchase Life of Barbados Insurance.
But Colinaļ¾“s dominance continues to create concerns
"For our small economy I think this could cause a huge loss of jobs because a purchasing company which has bought a number of other companies certainly won't need a whole bunch of people," said Keith Major, vice president of Imperial Life Insurance. "They would only need one person where there were four persons in each of those companies."
But in announcing their company's acquisition of Global, Colina officials said that there will be very limited loss of jobs.
At the time, President of Colina James Campbell told reporters that, "What this company is setting out to do is to position itself to be competitive to function at international levels within the next three to five years. We are all very mindful…that we can no longer just be doing business in The Bahamas."
In recent weeks, Mr. Campbell was unavailable to comment on concerns being raised by other insurance executives regarding his company's rapid growth.
The Colina official who asked not to be named pointed out that fewer insurance companies is actually good news.
He said that compared to a number of other Caribbean countries, The Bahamas has "too many" insurance companies for a population of only 300,000 people.
The source indicated that the more insurance companies there are, the more expensive rates are because they are all competing for customers in such a small market.
But an executive at British American Insurance said that this was a weak argument because Colina appeared to be trying to create a monopoly.
He pointed out that this is "bad for competition and bad for clients."
"Competition causes prices to stay down," he said. "Competition causes prices to be honest. I suspect there will be uproar from industry executives."
Mr. Major added that "competition is good for stabilization of any economy."
"Where is this company getting the money from? We don't know," he said. "When we look at their financials we don't see where they can get it from."
Mr. Major added that, "We have the experience of Abaco Markets which bought up a whole lot of companies and then they had to declare a $25 million debt to the point where they could not pay preference shares."
Rodger Brown, insurance registrar, pointed out that there are no competition laws to prevent companies from participating in wide scale buyouts.
Colina Insurance is a member of the Colina Financial Group which is a diversified Bahamian based financial services group with total assets under management in excess of US$1 billion. In addition to life and health insurance Colina provides property and casualty insurance, investment management, mutual fund administration, offshore trust services,
By Yvette Rolle-Major, The Bahama Journal
