Home' Trinidad and Tobago Guardian : April 6th 2018 Contents SAGICOR FINANCIAL CORPORATION LIMITED
FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2017
The Sagicor Group experienced a good performance for the 2017 financial year, with
improvement in the key areas of revenue, net income and equity.
This performance was in the context of contrasting economic conditions, both regionally
and internationally, where Sagicor operates. Regionally, the Caribbean experienced modest
economic growth, but continued to engage in fiscal consolidation through various measures of
tax increases and public expenditure cuts to reduce high levels of public debt. Internationally,
the USA experienced growth, increases in interest rates and a significant, but favourable change
in its tax regime for business.
Group Net Income was US $115.3 million, compared to US $109.3 million in the prior year, an
increase of US $6.0 million. Group Equity was US $932.3 million, compared to US $795.4 million
in the prior year, an increase of US $136.9 million.
Net income attributable to shareholders was US $72.2 million, compared to US $61.7 million in
the prior year, an increase of US $10.5 million. Earnings per common share was US 23.7¢, and
represented an annualised return on common shareholders' equity of 13.3% compared to 12.6%
for the prior year.
Total revenue increased to US $1,220.9 million, compared to the prior year amount of US
$1,134.1 million, an increase of US $86.8 million or 7.7%. Net premium revenue reached US
$745.6 million, compared to US $664.0 million, an improvement of US $81.6 million or 12.3%.
Premium income increased in all segments and benefited from the issuance of a single premium
annuity relating to our Jamaica segment.
Net investment income was US $379.2 million, compared to US $353.4 million in the prior
year, an improvement of US $25.8 million and benefited from higher investment gains in our
international investment portfolios.
Fees and other revenue closed the year at US $93.7 million, compared to the prior year amount
of US $116.8 million, a decline of US $23.1 million. There was a reduction in commissions income
on insurance and reinsurance contracts amounting to US $19.8 million, reflecting commissions
net of gains due to reinsurers on supporting assets in our USA segment. Exchange gains/(losses)
also showed a loss of US $4.2 million, compared to gains of US $12.6 million in the prior year, a
reduction of US $16.8 million. Foreign exchange movements were affected by a strengthening
of the Jamaica dollar when compared to the United States dollar in 2017, resulting in foreign
exchange declines in financial assets denominated in United States dollars in our Jamaica
segment. Overall, the company experienced a gain on translation of the Jamaica segment, which
is reported in other comprehensive income. In addition, the prior year included exchange gains
relating to declines in the Trinidad dollar, when compared to the United States dollar, there was
no significant foreign exchange movement, relative to this currency in 2017.
Total benefits closed at US $660.8 million, up from the prior year amount of US $560.4 million.
The growth in benefits is consistent with that of the growth in premium revenue and partially
represented increased provisions for future benefits. Included in benefits were net costs of US
$8.5 million relating to claims exposure from hurricane activity during the year, along with an
increase of US $14.2 million relating to the impact of the Tax Cuts and Jobs Act rate reduction in
the United States, which came into effect in 2017.
Expenses (including agents' and brokers' commissions) closed the year at US $436.4 million,
compared to the prior year amount of US $424.2 million, an increase of US $12.2 million. The
Jamaica Segment incurred some non-recurring costs, together with higher administration costs
relating to the expansion of cards and payments business.
Income taxes were US $18.6 million, compared to US $41.7 million in the prior year, a reduction
of US $23.1 million. This was principally related to our USA Segment. During 2017 the Tax Cuts
and Jobs Act was signed into law in the United States, which reduced the effective corporation
tax rate. This contributed to a decrease of US $19.9 million in income taxes and an increase in the
provision for future benefits of US $14.2 million in the segment.
Group comprehensive income was US $179.3 million, compared to US $96.7 million for the prior
year, an increase of US $ 82.6 million. The principal sources of the increase were an improvement
in net gains on financial assets of US $18.7 million, resulting from marked-to-market gains on
financial assets in our international portfolios, a positive movement of US $38.2 million on
retranslation of foreign currency operations, resulting from a gain in the Jamaica dollar when
compared to the United States dollar and a positive change in gains/(losses) on defined benefit
plans for employees of US $ 37.8 million.
The discontinued operation represents our UK business, which was sold on December 23,
2013. The terms of the sale required Sagicor to retain an interest in the 2011, 2012 and 2013
underwriting years of account, subject to a limit denominated in pound sterling. At the end
of 2015, the Company had fully provided for the contingent exposure relating to this business
(the limit). During 2017 there were positive developments in this exposure which resulted in net
income of US $10.1 million.
In the statement of financial position as at December 31, 2017, assets amounted to US
$6.8 billion, compared to US $6.5 billion in the prior year. Liabilities closed at US $5.9 billion,
compared to US $5.7 billion in the prior year. Sagicor's Group equity totalled US $932.3 million,
compared to US $795.4 million in the prior year; an increase of US$136.9 million.
The Group's debt, which is included in other liabilities, was US $413.8 million. The debt to capital
ratio was 30.7%, down from 33.2% for the prior year.
Sagicor has voluntarily adopted the Canadian international capital standard, "Minimum
Continuing Capital and Surplus Requirements" (MCCSR), and has been following this standard
since 1991. The MCCSR seeks to demonstrate to policyholders and shareholders the capital
strength of the life insurance companies of the Group, as a measure of its ability to meet its long-
term obligations. Canadian regulators expect insurance companies to maintain an MCCSR ratio
of 150% and Sagicor has consistently maintained a ratio above 175%. As at the end of the year
our MCCSR Ratio was 258%.
Sagicor is listed on the Barbados Stock Exchange, The Trinidad and Tobago Stock Exchange and
the London Exchange. We comply with the rigorous requirements of these exchanges.
Sagicor is rated on an annual basis by AM Best, Standard and Poor's Global Ratings, and Fitch
Ratings. We have been rated by AM Best since 1998, S&P since 2006 and Fitch since 2015. These
ratings are an independent measure of our financial strength. The current ratings are as follows:
• AM Best - "A-" Excellent
• S&P - BB- stable
• Fitch - B stable
Sagicor has embarked on a programme to provide relief from the recent hurricanes. To date,
Sagicor has made a financial contribution of US $300,000, as well as the provision of goods
and services. Consistent with our vision to improve the lives of the people in the communities
in which we operate, key initiatives include a school feeding programme to students, a mobile
medical clinic and assistance to the regional airline, LIAT. We have also partnered with The
University of the West Indies to host a Celebrity T20 Cricket Hurricane Relief Benefit to raise
additional funds for the islands which have suffered significant damage during the passage of
hurricanes Irma and Maria in 2017.
During 2018, the Sagicor Group will continue to work on the corporate re-organisation to
respond to the changing regulatory environment, while we continue to pursue opportunities for
On behalf of the Board of Sagicor, I wish to thank our shareholders and customers for their
April 4, 2018
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December
Amounts expressed in US$000
Property, plant and equipment
Associates and joint ventures
Income tax assets
Miscellaneous assets and receivables
Assets of discontinued operation
Other insurance liabilities
Investment contract liabilities
Total policy liabilities
Notes and loans payable
Deposit and security liabilities
Income tax liabilities
Accounts payable and accrued liabilities
Total shareholders' equity
Non-controlling interest in subsidiaries
Total liabilities and equity
These financial statements have been approved for issue by the Board of Directors on April 4, 2018.
(in US currency except percentages)
Overall Group net income
Overall Shareholders' net income
Net income allocated to non-controlling interests
Group total comprehensive income
Total comprehensive income attributable to Shareholders
Ratio of Debt to Capital
Earnings per common share
Book value per share
Annualised return on common shareholders' equity
Links Archive April 5th 2018 April 7th 2018 Navigation Previous Page Next Page