|Blue Cross of Jamaica ... Over and Out|
By the time we ‘quint’ the familiar Blue Cross of Jamaica, 50 years strong, will be no more.
Sagicor Life Jamaica Limited has been given 60 days by Blue Cross/Blue Shield, international owners of the brand, to finalise the transfer of the Jamaican business. After five decades of operation, in Jamaica, the familiar blue and white seal will disappear to be replaced by the insurance conglomerate Sagicor's green and blue logo.
By January, the four Blue Cross of Jamaica offices across the country, including its Kingston headquarters, will be renamed Sagicor Life Jamaica. Sources say the rebranding could be finalised as early as January 1. But Sagicor Jamaica can use the name of Blue Cross up to February, under the agreement struck with the foreign owners of that brand. Sagicor Jamaica's spokesman Karl Williams confirmed that the company had secured the vesting order from the minister of finance that cleared the way for finalising the acquisition deal with principal owner Dr Henry Lowe, who owned about 75 per cent to 80 per cent of the company through the Environmental Health Foundation, parent to Blue Cross of Jamaica.
Sagicor Jamaica has acquired 100 per cent of Blue Cross' $2.6 billion health portfolio as well as the buildings and office space occupied nationwide. "It does not include rights to the name," said Williams. Sagicor Jamaica is now in discussion with the people that did business with Blue Cross to assure them that "nothing has changed" and that it would be "business as usual through the transition". Special talks will be held with pharmacies and health providers who already accept both Sagicor and Blue Cross insurance.
The company expects to finalise the merger of the two operations no later than March, at which time the new health business, including the 200 or so employees of Blue Cross would have been brought under the umbrella of the employee benefits division.
During that time, there will be no disruption in service to holders of Blue Cross insurance, but their cards will eventually be switched for Sagicor branded ones within the transition period. "We're doing that because business has to continue," said our inside source.Williams says for now no jobs would be cut, and that all contractual arrangements remain in place. He, however, would not comment on what was likely to happen after March, and was evasive on the question of whether health insurance costs would rise.
Blue Cross is already perceived as offering the more beneficial packages for policyholders. Williams said the benefits packages are dictated by individual contracts negotiated by employers, and what they negotiate tends to reflect what companies can afford. But pressed on whether affordability was also not a function of what Sagicor Jamaica charges employers to administer the scheme, Williams again said it was "a negotiated position."
Blue Cross was a profitable operation at acquisition, at least up to 2007 when it made $45 million in net profit, according to disclosures by Sagicor. That, however, was a 41 per cent decline on the $76 million of surplus reported in 2006. Blue Cross' website says its business covers some 400,000 Jamaicans. The acquisition gives Sagicor Jamaica a 17 per cent bump in revenues, and grows its already large health insurance portfolio from around 50 per cent market share to just shy of 80 per cent, according to Williams. Guardian Life's Medecus controls 16 per cent.
Sagicor Jamaica and Guardian are now the only two insurance companies left in the health insurance market. The two are expected to face off in the new year over the outsourced government insurance contract, GEASO - an approximate $2 billion scheme that Blue Cross controlled for about a dozen years, before the Contractor General forced it open to competitive tender. "As soon as the ministry puts it out to tender, we will bid," said Williams.
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