Sagicor Financial Company Limited (SFC) will be looking to deploy greater technological solutions to automate and optimise portions of its growing financial services business.

SFC took a big dive in late 2022 when it launched Sagicor Bank (Barbados) Limited which was the English-speaking Caribbean’s first neobank supported by cloud-based banking systems and data analytics. Although the business is still in its infancy after its March 2023 opening, it has become a platform for SFC to explore new opportunities with technology to grow different business lines, including insurance and asset management.

“We are investing in our operations here in technology to make them more efficient, to make the jobs easier for our team and to make it easier to access our customers. Here in the Barbados market, you’d have seen that we made a significant investment to launch a digital bank which is still in its early days, but we see it as a template for using technology to expand our markets and interact with our customers in different ways. Over time, we’d like to see migrating that to other jurisdictions in which we operate,” said Andre Mousseau, SFC president and chief executive officer (CEO) at the company’s June 13 hybrid shareholder meeting at Hilton Barbados Resort.

SFC’s other major technological initiatives in 2023 included digital upgrades to Ivari’s different digital platforms, digital enhancement projects and eDelivery for annuities at Sagicor Life Insurance Company in the USA, centralised processing for Sagicor Life Inc in the Southern Caribbean and implementing over 15 critical enhancements to the Enterprise Customer Relationship Information System (ECRIS) platform at Sagicor Group Jamaica (SJ). SFC spent US$4.70 million on software during 2023.

All these technological advancements will be crucial for SFC, whose geographical presence gets more diverse across the Western Hemisphere. Ivari, a Canadian insurer, contributed 48 per cent of SFC’s US$355.22 million in insurance revenue during the first quarter. SJ was responsible for 23 per cent while Sagicor Life Inc and Sagicor Life USA contributed 22 per cent and seven per cent of insurance revenue.

SFC’s net profit attributable to shareholders moved up from US$1.41 million to US$26.25 million during the first quarter as Sagicor Life USA had a lower insurance contract expense during the period. SJ was the only business which saw net profit contract. SFC is currently in the final stages of developing a framework to better represent the different business segments under IFRS 17.

SFC closed a private placement of CA$250 million in senior unsecured notes on June 20 which carry a 6.359 per cent interest rate and are due June 2029. These funds are intended to refinance some of the money spent to acquire Ivari. SFC had acquired Ivari for CA$375 million which was funded by a syndicated senior secured term loan of US$320 million at around a 10 per cent interest rate August 2027. This refinancing was made possible due to the company’s investment grade credit rating and is set to save SFC millions in interest costs.

SFC’s share buyback programme was renewed earlier this month which allows it to purchase up to 8,951,359 common shares between June 24, 2024, to June 23, 2025. This move will significantly benefit its largest shareholder JMMB Group Limited which has seen its stake rise from 22.52 per cent in December 2019 to 23.62 per cent as of March 2024. SFC also increased its quarterly dividend from US$0.05625 to US$0.06 in March.

Jamaican operations

SJ has not slowed down on its own technology spend as its communication and technology spend grew 28 per cent to J$3.76 billion while it spent $218.55 million on computer software across the group. This is all part of the five-year digital journey which will encompass agile products and an omnichannel focus. A major group project will be Sagicor Evolve which aims to further digitize the insurance offering in the coming years.

“We’ve laid out a comprehensive five-year plan which covers all our lines of business. Our digital transformation strategy is more than just a technological upgrade; it’s a fundamental shift in how we serve our customers and operate as a business,” said Zacca. “We are dedicated to creating a seamless and intuitive experience for our clients across all touchpoints, whether they prefer online, mobile, or in-person interactions,” said SJ President and CEO Christopher Zacca at the company’s May 22 annual general meeting.

Sagicor Bank Jamaica Limited (SBJ) has been focusing on its future-ready approach by incorporating ‘phygital’ (portmanteau of physical and digital) branches into its current expansion plans. This is meant to allow persons to open new accounts without needing to see a person.

There will be a revamp of the commercial and investment banking platforms with 2024 to see further streamlining of its loan origination system. The investment team is developing a new user-friendly platform to handle IPOs and APOs which will include updates on allocations and refunds. One of the intended plans is to allow for greater self-serve options for credit and debit cardholders along with new controls to manage prepaid cards which are to be relaunched this year. SBJ is the only Jamaican bank to not offer ACH (automated clearing house) on its online banking platform for retail clients.

“We’re advanced in our [digital] wallet development. It’s one of our agile lab projects and Jam-Dex is part of it, and we’re making steady progress on it as well as other methods of electronic transmission of payments. Towards the latter part of this year, we’ll see products being rolled out. We have a full suite of digital enhancements to Sagicor Bank that are going to be rolled out over the next one to three years,” Zacca added.

With respect to Alliance Financial Services Limited (AFSL), the business is gaining back traction again in its operations with the primary remittance agent generating $1.25 billion in revenue and more than $300 million in net profit for 2023. AFSL contributed $697.36 million in revenue and $68.74 million in net profit for the nine months in 2022. The 2023 performance puts it marginally behind the 2019 period where AFSL had $1.67 billion in revenue and $782.63 million in net profit.

Alliance Financial had announced in 2023 that it was intending to become an instant payment provider (IPP) for all utility companies and Sagicor Life Jamaica Limited. Its CEO Omar Brown noted that they had garnered one utility company so far for the IPP and were looking to add two other utility companies later this year. This is consistent with the plan to further grow its subagent network and offer additional services.

SJ’s first quarter saw its insurance revenue rise 14 per cent to J$12.51 billion, but a higher loss on onerous contracts and increased staff compensation saw the net insurance result dip 20 per cent to J$1.02 billion. A swing from unrealised gains to an unrealised loss and higher operating expenses pushed its consolidated net profit down 55 per cent to J$1.02 billion.

Total assets closed the period at J$565.40 billion with financial investments topping $343.38 billion. Total liabilities and equity attributable to shareholders was $467.35 billion and $95.61 billion, respectively. All the SJ subsidiaries were in compliance with their capital requirements with Sagicor Life Jamaica’s LICAT ratio decreasing in the quarter from a dividend payment to its parent company.

SJ’s stock price closed Tuesday at J$40.50 which leaves it down 15 per cent in 2024 with a market capitalisation of J$158.18 billion.