Acquisitions see Sagicor post profits of J$4 billion

Saturday, November 21, 2009 7:09 AM

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Business

By Al Edwards

Friday, November 06, 2009

Sagicor Life Jamaica, the country's largest life insurer, has had its best year to date posting net profits of J$4 billion for the nine-month period to September 2009 mainly due to some judicious acquistions made last year. Sagicor made the bold move of acquiring Blue Cross and Industrial Alliance in Cayman last year before going in for Guradinan Life Cayman, earlier this year.

These moves assisted in swelling its total revenues which came to $21.3 billion, a 47 per cent increase on the prior year. Net premium revenue raked in $14 billion. Speaking with Caribbean Business Report from Sagicor Life Jamaica's Kingston headquarters, Chief Financial Officer Ivan Carter attributed the dramatic increase in revenues to the new acquistions, portfolio growth and new products. He pointed out that during the period under review, a total of $7.7 billion was paid and or accrued as gross benefits to policyholders and beneficiaries, an increase of 51 per cent over the same period last year. This was mainly due to Sagicor Life Jamaica now having considerably larger health insurance and annuities portfolios.

Sagicor Headquarters

This impressive revenue performance produced net profits of $4 billion, a significant increase on the $2.3 billion recorded for the corresponding period in 2008. Shareholders will be pleased to note that for the period under review, Earnings Per Share (EPS) came in at $1.07, a marked increase on the 62 cents registered last year.

Total assets of the group grew to $135.4 billion compared with $98.6 billion for the nine-month period last year. The group's financial investments formed the lion's share of its asset base.
Total benefits and expenses jumped to $16 billion for the nine-month period ended September 2009 as opposed to $11.2 billion last year. This was due to the group absorbing larger expenses due to its acquistions. Here it managed to contain expenses considering its organic growth.

For the period under review administrative expenses came to $4.4 billion, whereas last year it was $3.3 billion. There were also non-recurring restructuring costs of about $184 million relating to the Blue Cross portfolio integration and other structural changes within the group. Sagicor Life Jamaica efficiency ratio for the current period was 21 per cent as opposed to 23 per cent last year marking a ten per cent improvement. For the insurance operations the ratio for this year was 19 per cent, whereas last year it was 2008.