Jun 2012 Financial News

Sagicor reducing London-based operations

Jun 06, 2012

Regional insurance group Sagicor Financial has decided to exit from two lines of business which produced underwriting losses of up to $67 million in 2011.

Speaking in a press conference held yesterday at the financial centre’s corporate centre in Wildey, Chief Financial Officer, Philip Osborne disclosed to the media that the organisation had sought to refine its strategy for its London-based operations at Sagicor at Lloyds (SAL).

He informed that the decision was made last year to target the two lines as they were the areas which displayed the most consistent areas of losses for the insurance giant.

Osborne outlined, “As a result of our experience with these catastrophes and with a previous loss of $13 million in 2010 we have decided to refine the strategy of the business and have decided to exit two of fourteen business lines Sagicor at Lloyds’ was engaged in.”

He continued, “So when we separate out now the business of Sagicor at Lloyds,’ the performance from the lines of businesses which we have decided to discontinue and show separately the lines which we are continuing, the lines of businesses which we have decided to discontinue produced losses of US$67 million.”

For Sagicor, the first quarter of 2011 was marred with natural catastrophes, including earthquakes in Japan and New Zealand. According to Osborne, these “acts of God” severely affected their operations in the international property reinsurance market which over shadowed the overall performance of the company.

SAL, which offered international property and casualty insurance, experienced an increase in claims totalling $51 million of which $38 million were catastrophe-related for the financial year of 2011.

The London-based operations had struggled to retain its profitability over a period of time, with losses up $33 million for 2011 compared with a $13 million loss in 2010.

As such, the financial conglomerate decided to exit the international property reinsurance market and the UK direct motor market with what they expect to be only run-off exposure for 2012.

It is anticipated that with such changes implemented, the performance for the company will improve on its returns to shareholders for 2012. Such positive outlook can be attributed to the figures which showed the remaining thirteen lines of business at SAL producing underwriting profits of US$19 million for 2011.

Sagicor began their London market operations in September 2007 after its purchase of the Gerling at Lloyd's group of companies. (JM)


Source:
Barbados Advocate
Wednesday June 6, 2012

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=25138