Jun 2004 Financial News

Sagicor’s management confident

Jun 23, 2004

STAKEHOLDERS of Sagicor Financial Corporation have been assured of the company’s ability to deliver strong investment returns and excellent financial services.

The assurance has come from CEO and President, Dodridge Miller at an investor briefing on Thursday at the Sherbourne Conference Centre.

“We are confident about the future performance of the Sagicor Group, and of our ability to deliver strong investment returns to our shareholders while providing quality products and services to our customers,” Miller told those in attendance.

He said that the group’s performance for the first quarter of 2004 continued the very positive trend of 2003 with net income for the quarter reaching $14.9 million attributable to shareholders.

This, he said, “is significantly higher than the corresponding period for last year, and is in line with our forecast for the year 2004.” Revenue for the quarter amounted to $193.0 million, an increase of $23 million over 2002. Both premium and investment income recorded growth during the quarter.

Total assets increased by $0.2 million to reach $2.9 billion and shareholders’ equity had reached $650 million. “Management is confident that the forecasted results will be achieved,” Miller said.

He also said that early this year Sagicor received yet again an “A” Excellent Rating from A.M. Best and Company, the international rating agency for insurance companies. “Our rating was based on our strong market presence particularly in Barbados and Jamaica, strong capitalisation, and consistently strong earnings,” the President said.

It was also supported by the Sagicor strategy to continue to enhance market share and to grow earnings by at least 12 per cent over the next three to five years.

“This strategy calls for further streamlining of our existing operations to achieve greater efficiency and to reap additional cost synergies, Miller said.

The Sagicor President further noted that the financial performance of the Group of companies for the financial year 2003 is the product of a journey which was embarked upon at the beginning of the 1990s.

At that time, he explained, their assessment of the life insurance industry suggested that the structure of the industry was changing and the business was fast becoming a thing of the past.

That assessment also suggested that a number of strategic challenges were being faced by all of the companies operating within the industry.

They include mature regional markets, shrinking profit margins, increasing unit cost of operations, and increasing use of expensive technology.

“All of these issues militated against strong earnings growth and negatively impacted return on investments,” Miller said.

“In addition to these factors, there was a strong signal that there was convergence occurring in the financial services industry, and that the distinction between the products and services of the banking and insurance industry was no longer as clear as in previous years.”

The CEO explained that they at Sagicor needed to respond and to do so quickly “if we were to remain a competitive force delivering competitive return to our stakeholders and quality products and services to our customers. We concluded that we needed to increase both our scope and our scale of operation”.

He pointed to such initiatives as the 35 per cent investment in NEMWIL in 1991, the establishment of the Mutual Bank in 1993 to offer commercial banking products and services, the launch of credit and debit cards through the Sagicor subsidiary Caribbean Caricards in 1994, and the launch of the Mutual Global Balance Fund in 1998.

“These initiatives augmented our wide range of insurance products and services already being offered to our customers and policyholders, and provided the increased scope that we needed at that time,” he stated.

Miller revealed additional measures undertaken including acquisitions in Barbados, Jamaica, Panama, and the USA.

Source: http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=17976