After decades of underwriting general insurance (property and casualty) business in T&T, the American Life and General Insurance Company Ltd (Algico) ceased the operation of its general portfolio from May 1. The move by Algico, which has an asset base in excess of $731 million in T&T, will send scores of workers on the breadline, while some others have opted to accept severance packages. Some of the employees from the general insurance division, however, would be absorbed into different departments of the company. This follows an agreement in March 8 which stated that international insurance giant American International Group (AIG) negotiated with MetLife for the sale of Algico, which is the majority shareholder of Algico.
The sale of Algico for $15.5 billion was part of a worldwide restructuring programme that AIG implemented in order to repay the US government for its financial assistance. In a letter dated April 28 to policyholders, which are being posted in the mail, Algico's managing director Enrique Gonzalez explained that as a result of the sale, Algico had decided to continue only its life insurance portfolio in T&T, writing and renewing individual life, annuities and personal accident insurance, as well as group life, medical and pension insurance. Although Algico has had a successful general insurance division for decades, Gonzalez stated, the separation of Algico from AIG renders Algico unable to conduct general insurance business independently.
He assured policyholders that their general insurance policy were safe and the company would honour all obligations and continue to service all claims. "Your policy will remain in force until its anniversary date, at which time it will not be renewed." A source at Algico's Chaguanas branch on Wednesday stated that while Algico has stopped underwriting general insurance, the news has left many policyholders upset and fuming. "Our clients were not too happy with the decision taken," one worker explained. The source said workers who are not absorbed into the company would have to negotiate severance packages with its union. "It was a pain in the two knees when we heard that Algico was no longer doing general insurance." Algico's workers said since April they were hearing the rumours of the company's sale, but was only notified late last month.