Sagicor records US$48.8m net income to shareholders

For the second quarter of the year, Sagicor Financial Co Ltd reported a net income of US$48.8 million to shareholders, while its estimated core earnings to shareholders was US$13 million – excluding US$35.8 million of adjustments from net income to shareholders.

President and CEO of the company Andre Mousseau said in Sagicor's reports for the second quarter of 2023, the US$13 million recorded is a more accurate reflection of the company's underlying business performance.

He said, "We also benefited from refinements to the inputs to our discount rates on liabilities. which reduced the negative mark to market accounting volatility we observed in the first quarter of 2023."

New business segments, the report said, were robust, with the Sagicor Life USA recording US54.6 million in net income to shareholders. This figure, it said, was due in part to the refinement in the discount rate inputs.

Meanwhile, Sagicor Jamaica and Sagicor Life generated US10.8 million and US$8.7 million in net income to shareholders respectively.

Sagicor remains well capitalised, with its Minimum Continuing Capital and Surplus Requirements (MCCSR) of 286 per cent for its insurance businesses and a debt capital ratio of 30.4 per cent. Its total capital of US$2.1 billion includes the total net contractual service margin of US$697 million as a component of capital. This is because of the company's importance as a store of value and a future indicator of earnings, as it is expected to liquidate gradually into net income throughout the life of the insurance contracts.

Sagicor said it intends to disclose a drivers-of-earnings analysis and adopt non-IFRS (International Financial Reporting Standards) core earnings measure in future quarters, as it believes this will support users' understanding of the underlying financial and long term performance and valuation of the business.

Sagicor said the adjustments in the second quarter consisted of US$52.7 million of market experience gains and US$0.4 million in losses from actuarial methods and assumptions. While US$3.6 million in one-time costs from IFRS 17 implementation and the ivari project, US$2.7 million in other items such as amortisation of intangibles and US10.3 million consisting of the tax effects of the IFRS 17 implementation and the ivari project.

The market experience gain in Sagicor Life USA was partially offset by market experience losses in Sagicor Life and Sagicor Jamaica.