Argus-BF&M merger gets shareholder go-ahead

Argus Group and BF&M will merge on January 6 after their shareholders voted to approve the amalgamation which will create a powerful Bermuda’s domestic insurer.

The votes bring to an amicable end what began as an acrimonious takeover fight launched by Argus when it tried to buy the stock of  BF&M’s largest single shareholder.

Argus said in a filing that its shareholders voted to approve the amalgamation while BF&M shareholders voted to approve provisions of its bye-laws, including an increase in its authorised  share capital from $10 million to $20 million, to enable the merger to go ahead.

“With these conditions now satisfied, the amalgamation is expected to complete on 6 January 2025,” a joint statement said. “Trading in BF&M's shares and Argus' shares will continue to be suspended pending closing of the amalgamation.”

The merger will create a large local insurer offering everything from property and casualty insurance to life insurance to pensions. Argus also owns a number of medical practices and both companies have international subsidiaries, with BF&M operating its Island Heritage brand through 15 Caribbean jurisdictions. It has offices in Halifax, Cayman and Barbados. Argus has overseas subsidiaries in Gibraltar and Malta.

The announcement of the merger in June sparked concerns about the creation of a dominant insurer in Bermuda.

Health Minister Kim Wilson said it was shared the concerns of members of the public and said it would press the companies not to increase premiums, to continue to offer a full range of healthcare services, would support government’s proposed universal health coverage and would protect public funded health insurance plans.

In the 2023 financial year, BF&M had assets of $966 million, insurance revenue of $377.5 million and net income of $27.2 million.

Argus had net income $7.2 million in the year ending March 31, 2024 insurance revenue of $193 million, fee income of $52 million, general fund assets of $685 million and total assets of $1.9 billion.

By comparison, Coralisle Group, Bermuda’s third large domestic insurer, had general assets of $723 million in 2023, along with total assets of $1.6 billion, insurance contract revenue of $874 million and net income of $49 million. It has substantial Caribbean operations.

The companies said in July there will be some job losses as the companies combine functions, but did not know who would be affected at that point.

BF&M has about 240 employees , including about 100 in Bermuda, while Argus has 380 staff, including about 150 people in Bermuda, The Royal Gazette reported.

Abigail Clifford (pictured), who will be chief executive officer of the combined company in January, told The Royal Gazette in July that the merged company’s “increased scale and buying power will bring improved terms from international providers in the context of negotiating healthcare cost inflation”.

She also confirmed that any savings with respect to overseas care would be passed on to the consumer.

“We really do appreciate the Bermudian community's concerns,” she said. “Without a doubt, we are going to be better positioned with this increased scale.”