Sagicor Financial reports $40 million net loss

Sagicor Financial reports $40 million net loss | Insurance Business Canada

Insurance News

Sagicor Financial reports $40 million net loss

How did the company fare in Q2 2024?

Insurance News

By
Grant Funtila

Financial provider Sagicor Financial Company Ltd. (TSX: SFC) released its financial results for the second quarter ending June 30, 2024.

In Q2 2024, the company reported core earnings to shareholders of $25.3 million. This reflects a year-over-year increase driven by positive results in the Sagicor Canada segment, offset by additional interest costs related to the ivari acquisition.

However, it also reported net loss to shareholders of $40.2 million, attributed to adverse market conditions. This was influenced by $55.1 million in market experience losses and one-time costs associated with debt financing and the retirement of old debt, which are excluded from core earnings.

The Sagicor Life and Sagicor Jamaica segments also saw growth thanks to business expansion in short-term business associated with repricing and improved insurance experience on long-term business, while Sagicor Life USA’s core earnings to shareholders declined due to negative core insurance experience in Q1 and Q2 2024.

Sagicor’s capital position remained strong in Q2, with a Group-LICAT ratio of 138%, an MCCSR ratio of 309% for its insurance businesses, and a financial leverage ratio of 26.8%.

Core earnings to shareholders: US$25.3 million
Annualized core return on shareholders’ equity: 10.9%
Net loss to shareholders: US$40.2 million, primarily due to adverse market conditions
New business CSM: US$40.1 million
Shareholders’ equity: US$897.7 million, with a book value per share of US$6.36 or C$8.71
Shareholders’ equity plus net CSM to shareholders: $2.0 billion, or US$14.51 or C$19.86 per share
Financial leverage ratio: 26.8%
Group-LICAT ratio: 138%
MCCSR ratio: 309%
Dividend: US$0.06 per common share, to be paid in Q3 2024 (annualized dividend of US$0.24)

Andre Mousseau, president and CEO, remains optimistic despite the net loss of $40.2 million due to adverse market conditions related to asset and liability valuations under IFRS 17.

He cited progress on strategic initiatives, including optimizing their balance sheet, issuing bonds in the Canadian market, and reducing interest costs.

The company is confident these efforts will enhance its return on equity in 2025 and beyond. Overall, Mousseau said the new core earnings framework will allow its investors to better understand the earnings generation of each of its operating segments.

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