Ro­bust busi­ness boosts Sagi­cor Group profit

Jamaica Gleaner - - BUSINESS - Busi­ness@glean­erjm.com

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.

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