There is no need to fear.
That assurance has come from Chief Operating Officer of Sagicor Life Inc and General Manager of Barbados operations Edward Clarke, in response to concerns over the insurance company’s recent downgrade by Standard & Poor’s (S&P) from BB+ to BB-. He told Barbados TODAY that Sagicor was “still in a very strong position financially”, explaining that the rating change was directly linked to the lowering of Barbados’ sovereign rating to“B” from “BB-”on December 19.
“We have been downgraded because the sovereign rating of Barbados has been downgraded. The rule is really that you can’t be more than two notches above your sovereign rating, so that is why Sagicor was downgraded,” said Clarke.
“We are still a very strong company. The public has nothing to fear . . . I would not be worried at all and the public has nothing to fear.”
He also dismissed concerns raised by some residents that the downgrade could result in “another CLICO type fiasco”, saying that Sagicor and CLICO operated “very differently when it came to governance and transparency”.
In its statement on Sagicor issued on December 30, S&P noted that the company had “moderately strong” capitalization, its operating performance was improving, and it was in an adequate, competitive position.
However, it added, “although Sagicor passes our default stress scenario for Barbados, we cap the ratings at two notches above the country domicile due to our view that Sagicor has high country risk sensitivity”.
Insisting that Sagicor was still “very diverse and performing strongly”, Clarke said what was a matter of concern for the company was that Barbados’ rating continued to fall.
He said it was having a trickle down effect and the focus should be on improving the rating.
“ . . . Because it is going to impact those international companies like ourselves who seek international funding. Just like the Barbados Government, every time they get downgraded the cost of [obtaining] capital becomes greater,” the Sagicor official said.
“So it is really necessary for the country to get its rating back up. Likewise, we are pushing our company to ensure that we stay above the sovereign rating but the sovereign rating is the issue. So we have to keep working with the officials at large to try and make sure this country is on the right track.”
In a statement issued over the weekend, Sagicor said the group recorded net income of US$39 million for the nine months ending September 30, 2014, compared to a loss of US$1.9 million for the same period of 2013. It also noted that the group’s continuing operations recorded net income of US$39.6 million for the nine months in 2014, compared to US$39.3 million for the corresponding period in 2013.
Sagicor noted that while S&P’s outlook on the company remained susceptible to any further rating action on Barbados, the rating could be upgraded if the company maintains the positive trend in its operating performance, adequate capitalization levels commensurate with the “BBB” benchmark, completion of its plans to relocate its country of domicile to a country with at least investment grade ratings, strong regulations and adequate access to funding.
- TRINIDAD - Gov't prepares legislation to treat with asylum seekers
- GUYANA - Legislator who brought down gov't may have committed treason
- GUYANA - Gov't maintains position regarding incident involving Venezuelan navy
- JAMAICA - Twenty murders in first week of 2019
- Caribbean islands record three earthquakes in 24 hours
- GUYANA: Body of child found after gold mine collapses
- Mobile App