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Tuesday, July 22, 2025

Sagicor back in black with US$4.1m

by

20140402

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.


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