By Al Edwards, Financial EditorLOCAL GENERAL insurer Dyoll appears to be in a spot of bother as a result of facing the prospect of having to shell out insurance claims to the tune of around J$ 850 million as a result of Hurricane Ivan Wednesday Business understands.
Most of the claims are as a result of damage caused in the Cayman Islands with many policy holders now turning to their liabilities claims. A pay out of this magnitude will undoubtedly threaten Dyoll's capitalisation.
The Group is now desperately looking for a white knight to alleviate its predicament. Almost to the year, NCB paid $562 million before broker's fees for a 46 per cent stake in Dyoll and the word is that Dyoll has turned to NCB's chairman Micheal Lee Chin to come to its aid.
But as one analyst put it: " NCB is a passive investor and why would it sink capital into Dyoll when it is not clear at this point in time just what level of capital is needed to cover claims. You just don't throw money into a bottomless pit."
Guardian Life a stakeholder in Dyoll is showing a reluctance to throw the local insurer a lifeline.
Dyoll was one of those financial institutions that was 'FINSACED' but subsequently negotiated with the state run bail-out company to repurchase the over 16 million shares which it has held since 1997.
CREDITABLE PERFORMANCE
Under the stewardship of Stephen Thwaites, the Group has put in a creditable performance and has of late become a recommended stock. In its year to date financial performance, Dyoll earned $63.9 million or 28 per cent higher profits than for the comparative period last year. Recently the Group's earnings have come via core operations with less reliance on foreign exchange gains. Figures released for the 9 months to September show Dyoll saw a 286 per cent increase in operating profit with revenues growing by 4 per cent and operating costs falling by 5.11 per cent with a 27.8 per cent increase in net profit.
Yesterday the Chairman of the Jamaica Stock Exchange (JSE), Mr. Roy Johnson suspended trading in shares of Dyoll Group Ltd.
A statement issued read: "The JSE has required that the Company make a public announcement in response to rumours that Dyoll Group has experienced material financial losses. This information has not been reported to the JSE in accordance with Appendix 8.
The Exchange in seeking to establish whether such rumours and speculation were factual or not, was informed by the Managing Director of Dyoll Group, Mr. Stephen Thwaites that he was stopped by the Acting Chairman, Mr. Peter Lawson from providing any information and was therefore not able to respond to the Exchange's requirement that an announcement be made immediately by the Company.
The Exchange advises that the suspension will remain in place until the relevant information has been disclosed."
Last night,Mr. Stephen Thwaites was unavailable for comment.
Last night Dyoll share price lost$2.45 ( almost 15 percent) and fell to $14.50 on this latest news. Only last week Wednesday B usiness reported that Guardian General Insurance Limited, paid out a total of US$172 million in claims in the Caribbean region resulting from Hurricanes Charley, Frances, Jeanne and Ivan. Of that amount, nearly US$150 million went to property owners in the Cayman Islands.
