Sagicor Group Jamaica reports strong performance for core businesses
 

Sagicor Group Jamaica reports strong performance for core businesses: Group posts profits of $2.47 B for Q2 and $4.36 B for half-year financials

August 12, 2020

PRESS RELEASE
Sagicor Group Jamaica
August 12, 2020

Sagicor Group Jamaica reports strong performance for core businesses: Group posts profits of $2.47 B for Q2 and $4.36 B for half-year financials
Sagicor Group Jamaica has reported that for the second quarter of the year – April 1 to June 30, 2020 the Group generated net profit attributable to stockholders of $2.47 billion; for the six-month period, January to June 2020, profits were $4.36 billion.
President and CEO of the financial conglomerate, Christopher Zacca, share the company’s Q2 financial results during a virtually held media briefing on Tuesday August 11.
During the report, Zacca noted that the company’s Q2 performance was ‘very creditable’, especially in light of the fact that it was achieved during the height of the COVID-19 restrictions in the country.
“COVID-19 continues to have an impact on companies and individuals across the world. But even with the many challenges that the health pandemic has presented; as an innovative and forward-thinking company, we have and continue to find new ways to serve our clients and ensure we remain a strong and profitable Group of companies”, Zacca said.
The Group President & CEO also commended the Sagicor team for remaining dedicated and committed during this time and attributed the company’s continued success to the hard-working team members.
Despite the negative impact of the COVID-19 virus, Zacca shared that the operating cash flow of the company has increased by $2.48 billion and the Group continues to maintain strong liquidity by improving its cash position by $6.63 billion.
The Group also reported that total revenue before unrealized capital losses increased by 3% or $1.25 billion.
As the market leaders in the life and health insurance space, the Group’s Insurance businesses net premium income increased by 20% higher than prior year.
“We have seen healthy new business sales and portfolio growth which continues to drive core results. The key metrics of our Commercial and Investment banking businesses have also remained strong and are expected to improve as the economy begins to show greater activity”, Zacca said.
The Group’s subsidiaries’ performances were highlighted as follows:
• The Individual Life Insurance division posted net profits of $1.91 billion, 11% lower than 2019, however Net premium income of $13.66 billion was 7% higher than the comparative 2019 period. This was driven by new policy sales, both in Jamaica and Cayman, resulting in a 6% growth of the portfolio to 603,101 policies. There were large unrealized capital losses related mainly to our Segregated Funds and an increase of $1.94 billion in benefits to policyholders.

• The Employee Benefits Division produced profits of $2.46 billion, being 11% more than in 2019. Overall new sales were significantly improved over prior year with annualized new premium income indicating a 29% growth. The Division has also seen improvements in claims ratios when compared with prior year.

• Sagicor Bank contributed net profits of $0.72 billion for the period, a 31% reduction when compared to 2019. The results were severely impacted by higher Expected Credit Losses (ECL) on loans as a result of the impact of COVID-19 on Tourism, Entertainment and Energy sector loans and the slower than expected recovery of the economy. Fee based income of $1.94 billion was 3% more than prior year.

• Sagicor Investments showed strong results during the period, contributing $1.29 billion (excluding the share of AGIC earnings) to the Group, 12% higher than prior year. Fee income for the quarter was down compared to 2019, resulting from less corporate financing deals. The fluctuating rate of the J$ to the US$ during the period also negatively impacted these results as unrealized revaluation gains were significantly below prior year. However, the company picked-up appreciable trading gains and improvement in its net investment income, contributing to revenue of $3.11 billion, being 14% above 2019.

Overall, Zacca shared that the Group consolidated cash generated from operating activities was $9.10 billion compared to $6.62 billion in 2019 and that the liquidity of the Group remained strong with Cash and Cash Equivalents at the end of June 2020 being $25.69 billion, compared to $19.06 billion in 2019.
“Given the current climate in which we are operating, the Group is performing very well, and these results are testament to the solid foundation we have and the hardworking team that continues to go above and beyond to ensure the success of the business”, Zacca said.