Sagicor Life Jamaica puts in a creditable half-year performance

Published: Friday August 8, 2008

Life insurance giant Sagicor Life Jamaica, formerly Life of Jamaica has now completed its rebranding exercise and under the leadership of Richard Byles and part of a truly Caribbean financial corporation that is listed both in the Caribbean and the UK is looking to leave an even bigger footprint across the local market.

For the six-month period ended June 30, 2008 Sagicor Life Jamaica generated total revenues of J$9.17 billion, up 13 per cent on the J$8.136 billion produced last year. Gross premium revenue (J$7 billion) provided the lion share of total revenues with net investment income weighing in with J$2.274 billion for the period under review. Fees, commissions and other revenues also saw an increase moving to J$924 million in 2008 from J$860 million in 2007.

Individual Life and Group Life earned premiums of J$3.38 billion were up on the prior year by 12 per cent. Group Health earned premiums of J$2.31 billion and were up by 10 per cent.

For the period under review, J$3.32 billion was paid and or accrued as benefits to policyholders and beneficiaries, an increase of 18 per cent on 2007's figure.

Administrative expenses wee also on the rise, and at J$2.21 billion, represents a significant 18 per cent increase on last year's J$1.88 billion. Sagicor inflation is putting the rise in administrative expenses down to inflation, which leads to salary increases. Also its subsidiary Pan Caribbean Financial Services took the decision to launch a commercial bank division, a move that no doubt incurred sizeable costs and expenses.

Total assets came to J$96.7 billion, an 11 per cent increase on the J$85.4 billion posted last year. The majority of this year's total assets comprised mainly of available-for-sale securities which for the period under review stood at J$61.2 billion. The book value of stockholders equity for the six-month period was J$14.69 billion with Sagicor Jamaica distributing J$900 million (or 24 cents per share) as an interim dividend in March of this year.

The Interim Report to Stockholders signed over the signatures of the chairman Dodridge Miller and the President and CEO Richard Byles sought to explain the challenging circumstances that Sagicor's Jamaican operations are contending with.

"The high inflation rate, now over 20 per cent continues to be of concern as it has significant negative effect on our cost of operations and Life Insurance actuarial reserves. During the second half of the year we will be implementing initiatives to raise our operating efficiencies even as we pursue opportunities for business growth.

Last month it was announced that Sagicor Life Jamaica had secured an agreement to acquire the group health insurance portfolio of Blue Cross Jamaica Limited. Blue Cross manages J$2.57 billion in premiums under the Government Employees Administrative Services Only Health Insurance Scheme (GEASO) and J$1.86 billion in commercial premiums.

Commenting on Sagicor Life Jamaica's six-month performance, Byles speaking with Caribbean Business Report said: "All are profit centres did well, better so than last year. This is a testament to the quality of the company. Our entire staff particularly our sales team who are out there looking for business should take a bow. "The economic environment right now is particularly challenging. Standard& Poors is very concerned about the Jamaican economy and its management. Risk is a big factor now nevertheless the rating agency has faith in the the abilities of Don Wehby and the present administration."

Last month, Sagicor Life Jamaica offered it new preferred term product, which is a non-participating, renewable, convertible term insurance plan available to anyone between the ages of 30 and 69 years old.
The policy is for 10, 15, or 20-year renewal term periods to age 70 nearest birthday. Level premiums apply until age 70 but the rates at the beginning of each renewal period are those applicable to new business at that time.

The minimum sum insured is J$5 million. For sums insured between J$5 million and J$10 million inclusive, an amount of J$0.15 per $1,000 is added to the premium rate, for sums insured between J$10 million and J$17.5 million inclusive, an amount of J$0.10 per J$1000 is added to the premium rate and for sums insured between J$17.5 million and J$35 million inclusive, an amount of J$0.05 per J$1000 is added to the premium rate. In addition, a policy fee is charged which the company can vary from time to time. Premiums are payable monthly, quarterly, semi-annually or annually.

Speaking at last month's High Flyers Club, held at the Hilton Hotel, Sagicor's vice-president for Individual Line Sales, Mark Chisholm pointed to Sagicor's strengths noting that it operated in 23 countries, has seven consecutive ratings of "A" Excellent by AM Best and is listed on four stock exchanges.

"We now have 41 per cent of the local market while both NCB and Scotia are seeing their market share fall. Over the last two years the industry growth has been flat with a 10 per cent decrease in 2007 and year to date in 2008, a 15 per cent fall off. However, we at Sagicor continue to see growth while the rest of the industry declines. Last year we were 15 per cent above our 2006 figure in terms of new business and premium income revenue. To date we are four per cent above where we were this time last year."


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080807T220000-0500_138800_OBS_SAGICOR_LIFE_JAMAICA_PUTS_IN_A_CREDITABLE_HALF_YEAR_PERFORMANCE.asp