Sagicor Financial earnings halved
Published:Wednesday | April 6, 2011 | 12:00 AM
Sagicor Financial Corporation (SFC) saw its net profit cut in half at the end of its financial year ended December 2010, as the company's administrative expenses and benefits paid out to policyholders increased, despite improvements in revenues.
The regional insurance conglomerate recorded net profit of US$41.6 million, representing a 52.5 per cent decline when compared to the US$87.6 million the previous year, while revenues for the reporting period went up eight per cent to US$1.3 billion.
But it was a 25 per cent increase in total policy benefits that dragged down profits of which property and casualty insurance claims accounted for the majority.
Of the US$627.2 million in gross total policy benefits, property and casualty claims amounted to US$284.7 million.
Other benefits such as life insurance and annuity also increased, while health insurance claims for the period dropped slightly.
For the year, life and annuity benefits moved to US$154.9 million and US$89.6 million respectively, up from the US$144 million and US$88 million reported at the end of 2009.
Health insurance claims dropped to US$97.9 million, representing a 17.7 per cent fall from US$119 million for the corresponding period in 2009.
For the reporting period, expenses also climbed by 10 per cent to US$429 million. Of the total expenses, administrative, commission and commission-related compensation showed the highest movement.
SFC, which operates in 22 countries in the Caribbean, Latin America, the United Kingdom and the United States, closed the year with an asset base of US$4.8 billion.
And although the financials reflected a decline on its cash flow statement, the company reported cash and cash equivalent balance of US$279 million.
SFC's capital base is set to be further strengthened with the company signing an agreement with IFC, the investment arm of the World Bank, to inject some US$100 million into the company while taking a four per cent stake in Sagicor's ownership.
The investment by IFC represents one of the largest to the insurance sector with the funds slated to be used to further SFC's growth across the region.
The agreement, while already signed, is still subject to regulatory and shareholders' approval.
Sagicor Financial, on its website, said that as part of its growth strategy it will streamline new and existing operations so as to improve efficiency, expand and develop product offerings, optimise the use of capital to maximise shareholder returns and expand internationally and within the Caribbean.