President and chief executive officer of the Sagicor Financial Corporation Dodridge Miller believes that once the financial environment settles in the Caribbean, growth will be in excess of ten per cent. Miller remains bullish despite July's downgrade by A.M. Best. The renowned insurance rating agency attributed its downgrade to Sagicor Financial Corporation's exposure to the poorly performing Jamaican economy. A.M. Best downgraded the Issuer Credit Ratings (ICR) to "bbb-" from "bbb" of Sagicor's ultimate parent, Sagicor Financial Corporation and its debt rating to "bbb" from "bbb+" on US$150 million, 7.5 per cent senior unsecured notes due 2016. Sagicor Financial Corporation is publicly traded on Barbados, Trinidad and London stock exchanges The outlook for this rating and its subsidiaries remains negative.

Sagicor Life Jamaica's CEO Richard Byles begs to differ and believes that the rating by A.M. Best with particular reference to Jamaica is a bit unfounded.

He said: "This assessment does not seem to reflect the recent improvements in the economy following the debt exchange programme. There are positive signs all around that give us the confidence to support the current fiscal policies. We recognise that the government has taken some tough decisions, for example the recent divestment of Air Jamaica and the divestment and privatisation of the sugar estates. These are part of the critical actions that are required to move the economy forward."

Turning his attention to Sagicor's Jamaican operations he added: "The company recorded strong first-quarter results and I expect to report on a good second quarter."

Commenting on the group's financial results for the six months ended June 30, Miller said that he was excited about all the markets in which the company operated.

"They all have opportunities and they all have challenges of a different nature. I expect that the United States and the United Kingdom will grow faster than the region."

Sagicor Financial Corporation financial results for the six months ended June 30, 2010 were somewhat gloomy, and analysts believe lend credence to A.M. Best's downgrade.

Group net income dropped by almost half coming in at US$23.1 million for the period under review. For the corresponding six months in 2009, the Group recorded net income of US$40.4 million. In his Chairman's statement, Stephen McNamara said: "The Group's net income was adversely affected by insurance losses arising from the February 27 Chilean earthquake. Following a further review of all individual client exposures, the estimate of total losses for this catastrophic event was increased to US$10.4 million, net of reinsurance. Were it not for the provisions for this catastrophe, net income to shareholders for the period would have been level with the previous year."

Net income attributable to shareholders was equally bleak, amounting to just US$12.4 million compared with US$23 million for the same period last year. Revenue totalled US$587.7 million in 2010, and is approximately level with that recorded in 2009. Premium revenue was US$411.3 million, recording a 1 per cent reduction when compared to 2009's figure. Sagicor at Lloyd's operations significantly increased its premium revenue, while in contrast life, and annuity single premiums in the USA were significantly less than in 2009. Net investment and other income totalled US$176.4 million, recording a 3 per cent increase when compared to 2009.

Total Group comprehensive income consists of net income plus other gains and losses (including reclassification adjustments) that are not recognised in the income statement. Here Sagicor recorded US$58.3 million for the period, compared with US$52.9 million for the corresponding period last year.

The Group's mark to market investments in Jamaica and the United States continued to experience fair value gains. Total comprehensive income attributable to shareholders came in at US$33.3 million, a drop on the US$41.2 million registered for the same period last year.

Total assets moved to US$4.69 billion from the US$4.45 billion posted for the six-month period of 2009. Total benefits recorded were US$354.2 million for the period, an overall reduction of US$5.8 million over the corresponding total in 2009. The reduction in single premium life and annuity premium resulted in lower benefits, outweighing the increase in claims arising from the Chilean earthquake and benefit increases in other markets. Expenses for the period totalled US$201.6 million, an increase of 12 per cent over the corresponding total in 2009. Expenses incurred for insurance commissions and administrative expenses increased as a result of growth in premium revenue at Sagicor at Lloyd's. Cash flows from operating activities fell precipitously to a loss of US$48 million compared to a healthy positive US$96.12 million for the same period in 2009.

Shareholders'equity grew to an encouraging US$565.2 million for the period under review as opposed to US$483.4 million for the half-year period of 2009. Earnings per share (EPS) totalled US4.3 cents and the annualised return on shareholders' equity was 4.6 per cent compared with 10.1 per cent for the same period last year.

Sagicor Financial Corporation's chairman Stephen McNamara concluded: " The global financial and economic environment continues to present many challenges. While there are some signs of improvement, there is still considerable uncertainty as to the sustainability of the global and Caribbean regional economic recoveries. At Sagicor, we continue to experience improvements in the fair value of our investment portfolio and to enjoy growth in most of our business segments.

"We remain committed to the growth and development of our Caribbean markets, including Jamaica where the Government has taken steps, with the assistance of international institutions, to put the economy on a sounder footing."

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