Alico Rules Out ME Layoffs

The question of layoff or restructuring does not arise as there is no overlap in the two companies’ operations in the Middle East, Rodney O. Martin, Jr., Chairman and Chief Executive Officer of Alico, said in Dubai.

The insurance giant, on the other hand, is looking at adding 1000 more employees in 2010 as it did in 2009, notwithstanding one of the toughest years for the global economy and for the insurance industry, he said.

Martin, in Dubai as part of a global tour to apprise Alico’s clients, distributors, regulators and employees on the “sixth largest deal in the history global insurance industry,” said he expected the Middle East operations of the insurer would grow further. “We will continue to invest in people, going forward,” he added.

In the Middle East, Alico has 1,600 employees, 14,000 agents and two million customers. “We did not lay off a single employee last year in spite of the many challenges posed by the crisis. We don’t intend downsize in future too,” added Michel Khalaf, Alico’s Chief Executive Officer for the Middle East, Africa and South Asia.

Speaking to Khaleej Times, Martin said he expected the MetLife-Alico deal to close by the fourth quarter 2010. His current mission is to outline the roadmap to full integration. “We want to communicate to all what we intend to do from now on as we move towards the deal’s closure, and what we will be doing in the post-merger scenario.”

Alico’s parent company, the embattled American International Group (AIG), reached a definitive agreement on March 8 with MetLife to sell its foreign life insurance business to raise funds to repay huge government bailout..

“They (MetLife) are buying a growth story that is Alico,” said Martin. “Despite all the challenges globally and within our group, we had a solid 2009,” he said hinting at the year-end result that is to be announced soon. “The 2009 result is going to be one of the top four annual performances recorded in our 88-year-old history and reinforces our growth story. We are above the pre-crisis level. We could not have anticipated a much brighter picture,” he said.

Martin argued that the acquisition was a win-win deal for both MetLife and Alico. “We look forward to a smooth transition and a bright future as part of MetLife’s International Business team.”

MetLife, which currently has operations confined to the US and parts of America, expects the landmark acquisition to give it beachheads in 47 nations. MetLife, already the largest life insurer in the United States and Mexico, also stands to boost the proportion of its international business to overall revenues to 45 per cent from the current 15 per cent. “Combined, the two will have presence in 70 countries, the largest footprint among global insurers, representing 90 per cent of the world population,” Martin said.

The MetLife-Alico deal is the second proposed sale of a key subsidiary of AIG announced in a month to raise funds to repay the group’s massive government bailout. AIG’s Asian life unit, American International Assurance (AIA), was sold to Britain’s Prudential Plc for $35.5 billion, the largest deal ever in the insurance sector. Founded in 1921, Alico sells accident and health insurance, life insurance and fixed annuities to about 20 million clients in 55 countries.

issacjohn@khaleejtimes.com