By VERNON CLEMENT JONES, Senior Business Reporter

vernon@nasguard.com

At the same time a Bermuda insurance company enters the Bahamian life and health market, local giant ColinaImperial is chasing business outside of the country.

"From our perspective, we understand that the market is mature and we have to look for opportunities outside of this market," said ColinaImperial VP of Finance Catherine Williams. The company is an affiliate of The Nassau Guardian.

"But, we're not giving up this market or anything," she added.

Indeed, not.

For the nine months ending Sept. 30, 2006, Colina Holdings realized net premium revenues of $98.7 million, an increase of 3.6 per cent over the same period a year previous.

Despite that growth the country's largest life and health insurer is now actively looking to offer the same services in other jurisdictions like the Cayman Islands and the Turks and Caicos. Those, too, are well-established markets, operating under stable political governments.

"We are in the process of looking into licences and agents in the Turks and Caicos," said Williams, indicating the importance of the archipelago's "good regulatory climate".

But with a combined population of just over 47,000, that territory and the Caymans represent a market only about 15 to 20 per cent of that in The Bahamas.

This might on the surface suggest ColinaImperial is looking to expand in the wrong direction.

Not necessarily so, according to a survey of major American insurers: Mature markets - big or small - are the number one choice for companies looking for new business.

"The survey of more than 100 life insurance executives from around the globe reveals mature life insurance markets remain the top priority for those considering expansion – with the UK and US ranking at the top of the scale," reads the EDS report from last November.

Some 83 per cent of respondents cited the potential for higher margins and return on investment as the primary reason driving expansion to an already developed market.

That rational may be behind a move by BF&M, earlier this week, to begin offering health and life insurance in this country through a local agency.

The Bermuda insurer is now hoping to grow the size of its book outside the box of that tiny community of 66,000, with expansion here and to Barbados - another established market.

But there's a reason The Bahamas and others in the region are called "mature" said a representative with AM Best.

"In the case of The Bahamas, it means that there's not a lot of room for significant growth," said Christine Griffith yesterday. "That means there are a lot of established companies in the market already."

The comments raise questions about the soundness of BF&M's decision to come here.

Still there are profits to be made for those firms offering new insurance products able to exploit niche markets, said one analyst.

It may mean focusing on the growing number of single women, now heading the majority of Bahamian households.

The expected spike in retirees as baby boomers head into their sixties also offers an opportunity for insurers to focus on long-term care insurance.

Still jockeying between insurers in all markets across the region will likely heat up.

"Competition is always good in the environment of a free market," said Nadine Fraser, principle at LIV Insurance Brokers.

Her small group is the exclusive agent for BF&M in The Bahamas and is offering what it calls Universal Coverage policies, which incorporate life insurance with financial investment. It's a specialty product designed to distance LIV from competitors.

"We'll see how we make out," Frazer said.