Sagicor Sees Growth in Insurance Revenue in Barbados Amid Decline in Investment Income: Analysis of Financial Results

Financial services provider Sagicor has increased its insurance revenue in Barbados, but the group’s investment income from this market has fallen.

This mixed outcome is detailed in Sagicor Financial Company Limited’s latest financial results for the quarter and half year ended June 30, which shows that the company is getting most of its earnings from Canada where its recent acquisition Ivari is based.

Following the impact of one-time costs related to a debt financing and retirement of old debt, Sagicor president and chief executive officer Andre Mousseau said the group’s core earnings “shows that we are on track with our business model since onboarding our Canadian segment in 2023 and provides a solid platform upon which we can grow our earnings return on equity and ultimately value to shareholders in the year to come”.

Regarding the Barbados market, which is a core part of Sagicor Life in the southern Caribbean, the financial statements outlined that insurance revenue in the six months ended June 30 was US$62.4 million, up from US$56.6 million in the same period last year. For the three months ended June, insurance revenue was US$31.4 million, up from US$28.5 million in the same quarter last year.

The group’s overall insurance revenue was US$713.6 million in the half year, up from US$332.1 million in the same period last year. The biggest contributor to the increase was the new business in Canada – US$342.6 million. It was followed by Jamaica’s US$158.2 million versus US$137 million last year and then Barbados.

However, Sagicor’s report stated that the company’s investment income from Barbados has fallen.

Sagicor’s net investment income from Barbados was the lowest when the group’s businesses were segmented geographically. This was US$9.6 million in the half year and US$2.4 million for the quarter, down from US$16.2 million and US$5.3 million for the half year and quarter, respectively.

With overall net investment income totalling US$465.4 million in the half year, most of this came from the United States (US$165.3 million) Canada (US$159 million) and Jamaica (US$93.7 million).

Commenting on the group’s overall performance in an earnings release last week, Mousseau said Sagicor “delivered US$25.3 million of core earnings to shareholders in quarter two, within the range of our expectations and aided in part by positive aggregate insurance experience from our operating subsidiaries”.

“Our net income to shareholders was lower with a loss of $40.2 million, driven primarily by negative market experience,” the president shared.

He explained that “the market experience was due to differences in changes of our mark to market valuation of our assets and the calculated value of our liabilities, as dictated by IFRS 17”.

“We view this experience as transitory and subject to reversal over time, and therefore view core earnings as a better representation of the performance of our business,” Mousseau explained.