Sagicor delivers huge profits in strong quarter

The Sagicor Group has again recorded a robust quarter with net income of US$42.6 million (BDS$ 85.2 million) for the period ending June 30, representing a significant increase from the US$9.3 million (BDS$18.6 million) posted for the corresponding period in 2021.

In the insurance and financial services firm’s Management Discussion and Analysis of the second quarter performance, it outlined that the group’s performance was fuelled by very strong net premium income from the United States of America segment.

The Sagicor Group, established as the Barbados Mutual Life Assurance Society in 1840, comprises Sagicor Life Inc (Barbados and Trinidad and Tobago), Sagicor Jamaica, Sagicor Bank Jamaica Ltd, and Sagicor Life USA.

The financial services company operates in 19 countries, but its main markets are Barbados, Jamaica, Trinidad and Tobago, and the United States of America.

Sagicor USA has become one of the Sagicor Group’s strongest performers. It currently operates in 45 states in the US focusing on life and annuities products.

According to the Management Discussion and Analysis statement, which examined the quarter as well as the six-month period ending June 30, net profit rose substantially from US $61.1 million (BDS $122.2 million) for the corresponding period in 2021, to reach US $98.5 million (BDS $197 million) this year.

Despite the strong performance of the group, its management noted the company’s financial results for the review period continued to be “influenced by the COVID-19 pandemic’s residual impact on the economic environment”.

It added: “Sagicor’s geographic diversification has helped to mitigate the impact from the risks to any one country’s economy. During the pandemic, Sagicor, like other companies has focused on supporting our staff, customers, and suppliers, while developing responses to the business disruption. Despite the environment, the Group continued to grow revenues while remaining focused on customer service.”

An examination of the Sagicor’s revenue portfolios showed the bulk of income was derived from its individual life, health and annuities which reached US$550.8 million (BDS $1.101 billion) compared to US$360.3 million (BDS $720.6 million) for the comparable quarter of 2021. The performance represented a 53 per cent increase.

The next best revenue earner for the company was in group life, health and annuities, which brought in US$71.3 million (BDS $142.6 million) in the quarter, representing a four per cent decline from the US$74.5 million (BDS $148.8 million) recorded for the comparable period last year.

Regarding the outlook, Sagicor’s management said its financial results for the second quarter reflected “an unusual macroeconomic environment”.

It added: “Asset price volatility driven by geopolitical instability, inflationary pressures and rising interest rates created mark-to-market losses on Sagicor’s balance sheet. On the other hand, that asset price volatility enabled Sagicor to invest new policyholder funds at robust investment spreads, generating significant net income particularly in our US segment.”

On the impact of the COVID-19 pandemic, the management assessed: “In response to the changing, uncertain economic environment, the Sagicor Group has performed reviews and updated its assumptions, including those related to asset impairment, where necessary. Management has considered the potential impact of the pandemic on actuarial reserves but has concluded that it has not had a significant impact on actuarial assumptions and the valuation of actuarial liabilities of the Group.” (IMC1)