Sagicor Group Jamaica Limited (SJ) is looking to plant its flag further across the region including in the new oil player, Guyana, as it looks to replicate the success of its Grupo Sagicor GS, GA in other parts of Latin America and the Caribbean.

The financial conglomerate has been steadily building out its operations in the Cayman Islands while its 50 per cent controlled joint venture Grupo Sagicor’s with subsidiary Sagicor Costa Rica, SA has continued to grow its presence in Costa Rica. Sagicor Costa Rica earnings peaked in 2021 when it earned $5.52 billion in revenue and derived $1.22 billion in net profit as COVID-19 insurance requirements drove business activity.

However, as COVID-19 restrictions eased, this performance was cut in 2022 with $3.37 billion (US$20.4 million) earned in revenue and net profit dropping to $880 million (US$5.7 million). Sagicor Group’s interest in the joint venture is valued at $1.83 billion with its other partner being Capital and Advice SA (C&A), which is part of the Promerica Group.

“We’re looking at Guyana and we’ve sent two missions there and we have established partnerships and relationships there. Of course, I spoke about Costa Rica and how are we going to build out that model and duplicate it, scale it as time goes by,” said Sagicor Group president and Chief Executive Officer (CEO) Christopher Zacca at the annual general meeting held last Friday.

The 2022 SJ annual report highlighted that Sagicor Investments Cayman Limited, which began operations last year, grew its interest earning asset base by 95 per cent and is positioned to benefit from higher yielding securities in the market. Sagicor Life Cayman Limited also has 15,447 policies in force in the Cayman Islands which saw a boost in 2022 sales.

Zacca’s comments come at a time when its parent company Sagicor Financial Company Limited (SFC) is looking to expand its presence in North America with the planned acquisition of Ivari in Canada and opening of Sagicor Bank (Barbados) Limited this year being part of the plans. Sagicor Bank (Barbados) is the first fully digital-enabled bank in the Caribbean and opened on March 9.

“We are pleased to announce that it has now opened its virtual doors to customers and is enjoying early success. This initiative is the first of a wave of digital transformation we intend to pursue across Sagicor that will help us engage with our customers in powerful new ways and revolutionise how we administer our businesses,” said recently appointed SFC president and CEO Andre Mousseau in the 2022 annual report. Mousseau was also physically present at the SJ AGM on Friday.

Sagicor digital road map

“We have a fully laid out digital road map. We collaborate very carefully with our sister companies across the Sagicor universe. We have set up an agile lab and it’s about people, processes and technology,” Zacca added on Sagicor Group’s digital road map plans.

Sagicor launched Sagicor Plus in 2022 to confirm proof of life for pensioners using facial recognition technology along with enhancing its Sagicor Connect platform for human resource teams to generate retirement benefits online. There were also other digital moves made in 2022 and 2023 for Sagicor Bank Jamaica Limited (SBJ) and Sagicor Investments Jamaica Limited (SIJL).

When asked about the timelines or plans for the road map, senior vice-president of group technology Howard Gordon responded, “You’re really describing the road map. It’s coming and it’s coming quickly. So, we have to start with different segments of the organisation because as you said, it wasn’t there last year and we’re building that road map now. We will roll out different sections as we go along.”

A similar response was received by SBJ CEO Chorvelle Johnson-Cunningham about digital upgrades to its eBank platform considering the inability for customers to use the automated clearing house (ACH) feature at the moment. SBJ launched its EMV Mastercard last year along with net point-of-sale (POS) machines.

However, Alliance Financial Services Limited CEO Omar Brown highlighted that the platform to allow it to become an instant payment provider is ready and would form part of the growth plans in 2023.

“The bill payment platform is built already. We have tested quite a few of the utility companies. We’re ready to go and so, within in another 30 days or so, we should go. We’re looking to do direct to bank this year as well. We’re looking to add a lot of technology to what we’re doing now. As you can see, that’s where the market is, so you can look out for that,” Brown added.

SIJL CEO Tara Nunes also explained that the eInvest platform was currently under review following two initial public offerings (IPO) in recent times that garnered significant backlash from users over issues experienced.

“We certainly regret the experience that customers had. In the interim, we have reviewed our internal processes, we have strengthened the teams in our operations department to ensure that we have a much more smooth handling of refunds because that was particularly where the issues occurred,” stated Nunes.

Under the restated financials using IFRS (International Financial Reporting Standards) 17, SJ’s net insurance and investment result increased 115 per cent to $5.82 billion with net profit attributable to shareholders of $2.18 billion compared to a restated loss of $770.93 million. Only the investment banking segment recorded a loss in the period while all other segments experienced an increase in profitability.

Under IFRS 17, total assets decreased marginally year over year to $526.72 billion while equity attributable to shareholders rose eight per cent to $83.53 billion. Total consolidated equity dropped from $131.04 billion in March 2022 under IFRS 4 to $99.07 billion under IFRS 17.

However, Zacca explained that the group still had that capital as part of it was shifted with the introduction of the contractual service margin (CSM) which is part of total liabilities. The CSM, which Zacca described as a savings account, will be released in the future as the policies are amortised, which means that it will be released into the income statement. IFRS 17 impacts long-term insurance more than short-term insurance.

“There was a thing that said the insurance business has shrunk. It didn’t shrink. The assets are the exact same number. What has happened in [IFRS] 17 is that previously profits were recognised when you sold an insurance policy, individual life mainly. You took the present value of all the cashflows throughout the life of the policy into your P&L today. Now, that moves into CSM and each year, you get a piece of it throughout the life of the policy. There are endless formulas for that,” Zacca closed.