Robust business boosts Sagicor Group profit

FINANCIAL CONGLOMERATE Sagicor Group Jamaica (SGJ) benefited from good business across all its lines, resulting in net profit of $3.09 billion for the quarter ending September.

Profit was up by a robust 49 per cent relative to the 2015 quarter.

Over nine months, Sagicor Group earned $7.39 billion or 27 per cent more than a year earlier. That equated to earnings per stock unit of $1.89 compared to $1.49.

“Profitability of the main segments surpassed expectations and generally was better than last year. The overall performance was principally driven by good business growth across all lines, greater-than-expected capital gains on sale of securities and favourable benefits experience,” said Chairman Danny Williams and President & CEO Richard Byles in a statement accompanying the results.

The group said its outlook remains positive based on economic stability and its investments within the banking arena.

“We are seeing the benefits of our business growth, digitisation and enhanced client experience strategies in an improving economy,” said the directors. “The Jamaican economy continues to perform well with the quarter ended September 2016, showing the highest growth in 14 years.”

Sagicor, whose business lines include insurance, banking, investments and property services, collected $45.33 billion in revenue over nine months, up 14 per cent. Net premium income of $25 billion, which accounts for just over half of revenue, increased 12 per cent year on year.

Premiums under the individual lines of the insurance business, including Universal Life Segregated Funds, were also up by 9.0 per cent, while group insurance and annuity premiums were up 2.0 per cent. Investment income, before interest expense and capital gains, of $14.7 billion was 4 per cent higher than in 2015.

Policy benefits, including death claims, health claims, annuity payments, surrenders and fund withdrawals, totalled $15.65 billion net of reinsurance recoveries, compared with $14 billion a year earlier.

BENEFITS EXPERIENCE

Benefits experience was generally favourable with the higher claims cost reflecting portfolio growth.

Group administration expenses, including depreciation and amortisation of software, of $11.10 billion, were 15 per cent more than in 2015.

“The cost increase was driven by higher staff costs, expenses relating to our expanded credit cards programme and other nonrecurring items,” said the directors.

Sagicor Group closed the quarter with net value of $56.6 billion, a 29 per cent gain compared with a year ago. Its market value was nearly twice that at $97.48 billion at the end of September – up 25 per cent since December 2015 and 92 per cent since

September 2015. Its market cap has since fallen to just over $93 billion or $23.86 per share.