Sagicor Life Jamaica (SLJ) reported a 14 per cent decline in net profits for the second quarter ending June 30, 2012 compared to the corresponding period last year.
The insurance giant posted net profits of $1.1 billion over the period under review, versus $1.3 billion for the same three months last year, with the bottom line impacted by a sharp rise in benefits and expenses.
"Though premium income and investment income remained strong, there was a noticeable rise in the level of benefits to policyholders." said the company report accompanying the financials. "In addition, there was a higher effective tax rate in the PCFS Group."
Indeed, the decline in profitability occurred despite a solid 18 per cent increase in total revenues. SLJ posted total revenues of $7.6 billion for the period under review, improving from $6.4 billion in the June 2011 quarter. Net premium revenue rose by 20 per cent to $4.8 billion, while net investment income jumped by 33 per cent to $2.3 billion. Fees, commission and other revenues dropped by 33 per cent to $422.8 million.
The company saw benefits and expenses jump by 28 per cent increase to $6.3 billion over the period. Net insurance benefits incurred was 24 per cent higher at $2,6 billion; changes in insurance and annuities liabilities more than doubled to $1 billion and there was a 10 per cent increase in administration expenses to $1.7 billion.
Over the six month period ending June 30, SLJ's net profits of $2.7 billion are marginally higher than the comparative six-month period in 2011. Total revenues are up 14 per cent to $15.1 billion for the half-year period.