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Caribbean Assurance Brokers eyes expansion in T&T post-IPO

Jamaica-based Caribbean Assurance Brokers (CAB) has set its sight on Trinidad and Tobago in its bid to expand its brokerage operation in the Caribbean.

The company made the revelation in a prospectus for an initial public offering (IPO) posted on the Jamaica Stock Exchange website last Friday.

Beginning February 18, CAB will offer 52.5 million shares at JM$1.91 to be listed on the JSE’s Junior Market. Of the amount, 44,362,500 shares are reserved for the company’s directors, employees, key partners, and Mayberry clients. The remainder will be available for public purchase.

“The company believes that there are opportunities to expand its brokerage operations throughout the English-speaking Caribbean by setting up offices in Trinidad & Tobago and establishing strategic alliances in other Caribbean territories,”

In total, CAB hopes to raise JM$100,275,000 in new capital. However, taking into account IPO and listing expenses of JM$9,500,000, the company expects to receive approximately J$90,775,000.00.

Expansion of business, solar system

CAB will cover expenses related to the capital raise and listing on the Junior Market subsequent to the IPO. Furthermore, the company plans to use the proceeds to fund the expansion of its business outside of Jamaica’s borders. over the next five years.

“The company intends to…expand its brokerage operations to other Caribbean territories, expand the company’s solar photovoltaic system, and provide working capital for the company,” the prospectus stated.

Caribbean Assurance Brokers Limmited will use part-proceeds of the initial public offering to finance the installation of a 15-kilowatt solar photovoltaic system. (File photo)

CAB has indicated in its prospectus a particular interest in beginning its expansion in Trinidad and Tobago.

“The company believes that there are opportunities to expand its brokerage operations throughout the English-speaking Caribbean by setting up offices in Trinidad & Tobago and establishing strategic alliances in other Caribbean territories. Accordingly, the company intends to examine these opportunities with a view to growing its customer base and, in turn, its revenues,” the document said further.”

CAB expects the expansion phase will last the next five years, during which it will maintain a conservative dividend policy.

In addition, the insurance broker intends to finance the retrofitting of its building, on Old Hope Road in Kingston, Jamaica, with a 15kW solar photovoltaic system. The company estimates the project will cost JM$15,000,000, which wilt be recoverable over a three- to five-year time span.

The business of CAB

An insurance intermediary that connects clients with insurance underwriters, CAB has four major business divisions: international, general, employee benefits, and individual life.

Caribbean Assurance Brokers is considering expanding its operation in the Caribbean beginning with Trinidad and Tobago. File photo)

The company recorded revenue of JM$336 million for nine months ended September 30, 2019 — two per cent more than JM$328 million for the same period in 2018.

With other income contracting by almost JM$10 million and a JM$16 million increase in administrative expenses, CAB’s net profit reached JM$56.7 million , or 32 per cent less than the JM$83.2 million reached in 2019.

The insurance brokerage firm increased its assets by 15 per cent, moving from JM$543.6 million in 2018 to JM$639.2 million.