May 2011 Financial News

Byles banking on loyal customers to drive Sagicor business

May 27, 2011

Coming off of a tough year in which new business tanked 22 per cent and profit was flat, Sagicor Life Jamaica Limited has been strengthening the lines of communication with its remaining, and still large, customer base as it positions to ride the economic recovery.

President and chief executive officer Richard Byles said he is confident that Sagicor can harness the marketing power of its approximate 600,000 policyholders and investors to grow the business.

But he does not expect the recovery in insurance to take off immediately, notwithstanding early forecasts of a return to economic growth after three years of recession.

"We are set to achieve some economic growth - positive economic growth - this year; but consumer confidence and purchasing power is still lagging behind, so it will be a challenge to grow and defend our business in such an environment," said Byles, speaking at the company's 40th annual general meeting on Tuesday.

Last year, Sagicor Jamaica wrote J$16.65 billion of new business, a 22.6 per cent drop on the previous year's J$21.3b, but the fall in net premium revenue was contained to 12 per cent below the 2009 level, helped by a drop in reinsurance charges.

Net premium revenue of J$16b, plus investment and other income pushed total revenue to J$25.7 billion - still an eight per cent decline from J$27.9b - even as the insurance group grew its portfolio of funds under management.

Profits were flat at J$4.9b, but if the J$395 million write-off from discontinued operations in 2009 was taken out of the equation, profits would have dropped 7.7 per cent.

Byles said the growth in assets under management, which rose eight per cent to J$227.81 million was a reflection of customer confidence in Sagicor.

The company is reciprocating by improving on service delivery to them.

"Improved customer loyalty and satisfaction will lead to reluctance to switch to competitors and a likelihood to recommend us to others," he said.

So far, Byles said, the company has set up a contact centre and customer database, and is in the process of setting up a complaints register.

"We need to know where the complaints are coming from, how they are being routed, resolved and the turnaround time in solving them," said Byles.

The company currently does 40 per cent of its transactions electronically, but hopes to shift more transactions online as a cost-saving measure for the company and a way to speed up turnover on claims and other business for policyholders.

"We want to move transactions processed electronically by the company up to approximately 60 per cent over the next two years," Byles told shareholders.

"With our massive customer base we can't afford not to."

He reported that the company saved approximately J$2 million by switching to digital distribution of the company's annual report to shareholders instead of printed copies.

Sagicor last year grew its balance sheet assets to J$143b from J$135b.

At the end of the March 2011 quarter, assets climbed to J$150b and its book value to J$26.89b or J$7.15 per share. Sagicor also grew first-quarter profit from J$1.1b to J$1.35b.

Its stock, which trades under the symbol SLJ, is valued at J$9 per share. The company's stock market value was estimated Tuesday at J$33.85b.


Source:
sabrina.gordon@gleanerjm.com
Sabrina Gordon, Business Reporter
Jamaica Gleaner
Friday May 27, 2011

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