After a three-week trial which gripped the attention of the media and attracted widespread attention among the Turks and Caicos islands population, Cortez Simmons, the son and employee of Carl Simm
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Sagicor back in black with US$4.1m
Though profits dwindled from US$33.3 million in 2012 to US$4.1 million, Sagicor absorbed its loss from discontinued Europe operations to come out in the black with overall group net income of US$4.1 million for the year ended December 31, 2013. The group lost US$75.5 million from the discontinued operations in 2013, up from US$42 million in 2012.
“The Sagicor Group’s continuing operations, comprising our businesses in the Caribbean and in the USA, continued to perform well.
Net income from continuing operations of US$79.6 million was realised for the year ended December 31, 2013, (US$75.3 million for 2012); after accounting for capital losses of US$22 million incurred through the group’s participation in the government of Jamaica National Debt Exchange (NDX), and impairment provisions on Government of Grenada bonds,” Stephen McNamara, Sagicor chairman, said in a statement.
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. Earnings per common share (EPS) from continuing operations was 12.5 US cents and represented an annualised return on common shareholders’ equity of 7.7 per cent.
Sagicor recalled 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.
Continuing operations generated total revenue of US$1.03 billion compared to the 2012 amount of US$1.06 billion. The 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 US. 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.
Net investment income and other income were lower than previous year, at US$279.4 million compared to US$295 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.
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 US 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.
On July 29, 2013, the company entered into an agreement to sell Sagicor Europe (SEL) and its subsidiaries to AmTrust Financial Services, Inc (AmTrust), subject to regulatory approvals. Final regulatory approvals were obtained on December 23, 2013, on which date the sale was completed. The terms of the sale required Sagicor to retain an interest in the run-off of the 2011, 2012 and 2013 underwriting years of account after the syndicate has been formally sold and is subject to a limit.