Jamaica’s largest life insurance company Sagicor Life Jamaica put in a noteworthy financial performance for the second quarter ended June 30, 2011 posting a net profit of J$2.57 billion, a 22 per cent improvement over the same six-month period last year. This represents basic earnings per stock unit of $0.68 and an annualised return on average stockholders’ equity of 20 per cent.

This profit performance was derived from total revenue of J$6.43 billion, an increase on the J$6.15 billion posted for the corresponding period last year. Net premium revenue of $4 billion formed the lion share of total revenues with net investment income contributing $1.74 billion. Fees, commissions and other revenues came in at $630.6 million, a significant increase on the $159.5 million posted for the same quarter in the prior year.

Year-to-date total revenues amounted to $13.24 billion compared to the $12.7 billion posted for the year-to-date figure for 2010. Total assets grew to $157.6 billion, driven in the main by financial investments which contributed $103.7 billion to the aforementioned sum. Total assets grew by 15 per cent surpassing the corresponding period for last year which was $137 billion.

On each of the major performance measurements Sagicor Life Jamaica saw increases for the period under review. Earnings per stock unit (EPS) stood at $0.68, a 21 per cent rise on the $0.56 posted for the same period last year. Efficiency ratio (admin expenses/revenue) was up marginally at 23 per cent whereas last year the figure was 22 per cent.

Stockholders equity at $27.04 billion was an 18 per cent improvement on the $22.85 billion registered for the same period last year. Return on average stockholders’ equity (ROE) remained the same as last year at 20 per cent. Sagicor Life Jamaica’s second quarter profits for 2011 (April to June) was $1.29 billion, exactly the same for the first quarter but 20 per cent more than the second quarter of 2010.

President and CEO Richard Byles pointed out that in the quarter under review, capital gains were not as significant as those realised in the first quarter but underwriting results were much stronger.

The Group’s individual life business brought in total revenues of $4.59 billion, $46 million more than the $4.13 billion posted for the June quarter last year. Individual Life’s profit after tax for the period under review stood at $794.2 million, $114.6 million more than the $679.6 million registered for the June quarter last year.

Employee benefits, the largest contributor to the Group, weighed in with total revenues of $5.85 billion which produced an after-tax profit of $839.2 million. For the same period in the prior year, this segment’s total revenues were $6.30 billion, producing an after-tax profit of $664.6 million.

Sagicor was particularly successful with its banking and asset management arm whose revenues were just shy of $2 billion, generating an after-tax profit of $864.26 million. Last year was somewhat less productive here with total revenues amounting to $1.55 billion, spelling an after-tax profit of $578.3 billion.

The individual lines of business premiums were up by 13 per cent whereas group insurance and annuity premiums were down by 12 per cent due to smaller single premiums. Net investment income was just short of that in the prior year which included two months of pre-JDX returns.

Administrative expenses of $3.02 billion were eight per cent more than in 2010. Byles made it clear that the increased expenses were mainly due to higher compensation expenses, higher occupancy costs and much higher provisions for loan losses.

As the year progresses, Sagicor expects the 2011 efficiency ratio to be better than that for the full year 2010 which closed at 23 per cent. The group is re-entering the local real estate market and following its successful Winchester development project, has broken ground on another residential complex at Stratharin Avenue. This development is expected to be completed by July of next year.

Speaking with Caribbean Business Report from Kingston earlier this week, President and CEO of Sagicor Life Jamaica said: “In a challenging economic environment, our results are very gratifying. Profit performance continues to be steady and improved, up 22 per cent on 2010. The contribution from all three of our profit centres, individual life, group insurance and banking, shows improvement over last year.

“Revenue growth of four per cent for the six months is modest, but comes from products that are most profit efficient. I expect to see better revenue growth in Q3 and Q4. We have a fantastic agency force and broker network that power our revenue growth and keeps us at number one in the industry.”

Addressing the issue of customer experience, Byles continued: “We are taking this customer experience business very seriously. We are measuring and calibrating performance in every sphere so we can be assured of consistent high quality.

“We now have a 98 per cent answer rate, 97 per cent first call resolution rate, five days turn-around time for 90 per cent of provider health claims, and a complaints register. “Sagicor has broken ground for a $350-million apartment complex on Stratharin Avenue and it should be completed in 12 months. This is a cautious re-entry into the property development market after two years of in-activity.”