Claims spike at Sagicor
Published:Wednesday | November 27, 2013 | 12:00 AM
Correction & Clarification
In the article titled ‘Claims spike at Sagicor’, published November 27, 2013, the sentence: “Sagicor Jamaica closed the nine-month period with $3.78 million of net profit, down from $4.14 billion the previous year”, should have read: Sagicor Jamaica closed the nine-month period with $3.78 billion of net profit, down from $4.14 billion the previous year. We regret the error.
---------------------------------------------------------
Insurance leader Sagicor Life Jamaica paid out more than $9 billion in claims and other benefits over the first nine months of the year, a spike of about 18 per cent relative to the $7.76 billion paid out last year.
That and other expenses erased gains at the revenue line, leading to diminished profits.
Sagicor Jamaica closed the nine-month period with $3.78 billion of net profit, down from $4.14 billion the previous year.
Group net revenue grew by more than $4b to J$27.7 billion, but expenses rose by $5b to J$23.6 billion.
Sagicor Jamaica's group operations also comprise an investment subsidiary and its commercial banking operation. The company is in the process of reorganising to create a holding vehicle that will become the direct parent of all three entities under a shareholder-approved 'scheme of arrangement'.
The 19 per cent improvement in group revenue was driven by "very good new business" in the employee benefits segment, including pensions, as well as group insurance and individual life insurance, said Sagicor Jamaica group Chief Financial Officer Ivan Carter.
"We expect a very good last quarter," said Carter. "The last quarter is usually a very strong quarter for us."
Sagicor paid out $7.76 billion. Sagicor Jamaica President and CEO Richard Byles said in a statement to shareholders that the 18 per cent increase in benefits costs reflects portfolio growth, but also higher death and health claims, more annuities, as well as policy surrenders. Health claims account for 46 per cent of the benefits paid, he said.
Banking and asset management contributed $2.4 billion of revenue and $583 million of profit.
Like Sagicor Life, its subsidiary Sagicor Investments Jamaica Limited is a public company, but Sagicor Bank Jamaica is privately held.
Sagicor Investments reported $657 million of profit over nine months ending September. The company is owned 85.45 per cent by Sagicor Jamaica.
The Sagicor Jamaica group is ultimately owned by Sagicor Financial Corporation of Barbados.