In the wake of recent economic downgrades and with Barbadians expected to be hit with more belt tightening measures in the upcoming National Budget, top officials of Sagicor say they are keeping a watchful eye on economic developments in Barbados.
However, the insurance giant remains confident that it can successfully navigate any challenges in the domestic marketplace, which currently accounts for about 15 per cent of its operations.
“Our concerns have been mitigated by our strategy because you would have witnessed that Sagicor’s ratings have been unaffected by the recent downgrades of Barbados. Barbados also is just one small part of a very diversified Sagicor,” assured Executive Vice President of Corporate Strategy and Investor Relations Ravi Rambarran during a regional teleconference Tuesday.
“At the same time we continue to meet our new business target and our retention of our business. I think a lot of that speaks to resilience of the brand
. . . . So yes, we are concerned overall for the country but I think Sagicor is navigating those concerns through its strategy and brand quite well,” he added.
Rambarran also pointed out that with the redomicilliation of the company’s headquarters from Barbados to Bermuda last year, Sagicor has been able to maintain its high ratings.
In fact, he told regional journalists from Barbados and Trinidad who took part in the link-up with him in Port of Spain, the company has recorded one of its best performances in eight years, amidst a harsh economic climate, growing political uncertainty, high debt and high unemployment in some territories.
Rambarran said the company was expecting those conditions to continue into this year, but pointed out that effective navigation would continue as well.
Delivering the report on the company’s performance for the period ending December 31, 2016, and providing an outlook, Rambarran said: “When we look to the Caribbean, all markets experienced low economic growth . . . at the same time, all governments in the Caribbean have acknowledged that their fiscal deficit and public debt are unsustainable, and we also witness fiscal austerity in terms of tax hikes, cuts in public expenditure.”
He also acknowledged that in some markets unemployment and crime continued to pose challenges to the “social fabric” of economies with a reduced ability to generate foreign currency cash flow.
“Against this backdrop Sagicor performed. We had our best performance since 2008,” reported Rambarran.
And even with the Caribbean still experiencing fiscal challenges that are expected to have an adverse impact on the level of growth and capital, he preferred to see the glass as half full as he pointed out that “those fiscal challenges pose significant opportunities”.
He explained that there was the opportunity for insurance companies to replace expected cuts in public insurance and pension programmes, adding that Sagicor was also positioning itself to benefit from rising interest rates in some markets.
Last year, the company recorded net income of US$109.3 million, compared to US$76.8 million the previous year. Officials also reported positive earnings on net income attributed to shareholders, as well as increased revenue for the year under review. (MM)