Insurance giant Sagicor is reporting a 12 per cent increase in total revenues to US$472 million during the fourth quarter ending December 31, 2019.
This equates to a 35 per cent increase for the full year to US$1.9 billion, which the company said was driven by growth in life and annuity business in the Caribbean and the US.
However, while expecting the COVID-19 pandemic to influence the outcome of the company’s performance this year, Group President and Chief Executive Officer Dodridge Miller said it was still early days to say what that impact could look like.
Group President and Chief Executive Officer Dodridge Miller.
At the same time, he has given the assurance that the company was well capitalised to weather the expected economic shock.
“The Company’s performance for 2020 is uncertain given the evolving situation of the COVID-19 pandemic. The pandemic will materially impact the economies in all the jurisdictions where the company operates. Sagicor is well-positioned from the substantial capital raised in 2019 which will help support the company through this economic shock. The Company continues to actively monitor the development and will provide further updates as the impact on each of our markets become clearer,” said Miller in the report released last evening.
He said: “Sagicor is withdrawing its previously issued targets for 2020 in light of the COVID-19 pandemic and will not set out specific guidance for financial targets for the year until its effects can be assessed”.
There was strong growth across all three business segments of the company last year. Sagicor Life Inc, which includes the southern Caribbean operations, grew 45 per cent during the fourth quarter, representing a 57 per cent change for the year when compared to 2018.
Sagicor Jamaica witnessed a 23 per cent increase for the last quarter, which was driven by life and annuity insurance business including additional premiums from its recently acquired property and casualty business, fee-based income and banking revenue.
Total revenue for Sagicor Jamaica for last year grew by 25 per cent, benefiting from growth across all of its business lines.
On the other hand, Sagicor USA saw a 28 per cent decrease in the fourth quarter of 2019, due mainly to falling credit rates on its annuity products as the Federal Reserve lowered key lending rates, it said.
Despite the fourth quarter decline, there was a 33 per cent increase in total revenue for Sagicor USA, primarily driven by new business growth, increased premiums and significant gains in investment income.
Benefits and expenses for the company increased 46 per cent in the quarter under review, mainly due to higher life and annuity business and associated changes in actuarial assumptions.
Benefits and expenses grew 60 per cent for the full year, also due to actuarial assumption changes impacting liabilities associated with the significant single premium business, the company said.
“We delivered strong results in the fourth quarter and full year driven by solid growth across all business segments. 2019 was a transformative year and the listing on the Toronto Stock Exchange marked yet another milestone in the long history of Sagicor,” he said.
“The additional equity raised from the business combination between Sagicor and Alignvest enhanced our already strong capital position. While it is still early to assess the global impact from COVID-19, we are well-positioned to move forward our organic and growth initiatives, adapting to varying situations just as we have done in the past with other circumstances that were beyond our control,” said Miller.
The company said quarterly dividend of US$0.05625 per common share is to be paid in the second quarter of this year.
This quarterly dividend, which will be paid on May 29, 2020, to shareholders of record at the close of business on May 5, 2020, is the second dividend being paid since becoming a publicly listed company on the Toronto Stock Exchange in December 2019.
The company said it would continue to review its dividend policy “in light of the economic situation stemming from the COVID-19 pandemic”.
