Sagicor records profit

Sagicor Financial Corporation’s profit-making ways are continuing.
The company, which has its headquarters in Barbados, earned US$79.6 million in net income for the financial year ended December 31, 2013.
This was reported by chairman Stephen McNamara, who said Sagicor’s operations in the Caribbean and United States “continued to perform well”. Sagicor has sold its burdensome European business.
“Net income from continuing operations attributable to shareholders was US$39.1 million. Before accounting for the shareholders’ portion
of the above mentioned capital loss (US$9.3 million), net income from continuing operations attributable to shareholders was US$48.4 million compared to US$53.1 million for the prior year 2012,” the official said.
“Earnings per common share from continuing operations was US12.5 cents and represented an annualised return on common shareholders’ equity of 7.7 per cent. Recall that in 2012, there was a one-off gain of US$20.9 million relating to the recapture of a reinsurance contract. When this one-off gain is excluded from 2012 net income, net income attributable to shareholders for the current year shows a 21 per cent improvement in shareholder results.”
McNamara added that Sagicor’s continuing operations “generated total revenue of US$1 039.5 million compared to the 2012 amount of US$1 064.3 million”, pointing out that this reduction in total revenue “is as a result of a decision to reinsure 90 per cent (US$271.4 million) in new annuity business written in 2013 in the USA”.
Other revenue in 2012 benefited from a gain of US$32 million before tax (US$20.9 million after tax), on the recapture of a previously reinsured block of policies, he added.
The chairman also noted that events related to debt in Jamaica and Grenada negatively impacted on Sagicor’s income.
“Net investment income and other income were lower than previous year, at US$279.4 million compared to US$295.0 million for 2012. Net investment income for the current year was also impacted negatively by capital losses of US$22 million (US$9.3 million to shareholders) incurred on the Jamaica and Grenada government debt,” he said.
“Total benefits incurred from continuing operations totalled US$592.8 million, a reduction from the comparative amount of US$639.4 million in 2012. This reduction is the result of a reinsurance programme introduced in the USA segment, where a significant percentage of the business is now being reinsured.
“Expenses (including agents’ and brokers’ commissions) closed the year at US$348.1 million compared to US$325.1 million for the prior year. This increase in expenses is consistent with the growth in premium revenue.
Reminding shareholders that the Sagicor Europe experience had been a “particularly challenging” one, McNamara said “weak operating results from this segment over the years and a protracted sales process combined to impact shareholders’ equity negatively”.
One positive was the fact that “despite a challenging economic environment, the Caribbean and USA operations continue to grow and to produce positive results for shareholders”. (SC)