Despite interest rate cuts beginning in Jamaica since August 21, Christopher Zacca, president and CEO of Sagicor Group Jamaica Limited (SJ), has remained cautious on his 2025 outlook due to the lag for these rate cuts to begin having a meaningful impact on economic growth.

Zacca made that comment on Thursday at Sagicor Group’s third quarter media briefing at the Barbados Avenue head office. Sagicor Group Jamaica has had a mixed performance so far in 2024 as it had a two-fifths cut in its net profit attributable to shareholders from $4.46 billion to $2.64 billion while the overall nine months was down 34 per cent from $10.07 billion to $6.61 billion. This was due to impacts in the actuarial models which were adverse in the current period, tighter margins on its short-term insurance products due to higher drug and medical costs and higher operating costs related to staff and investments in digital platforms and data security.

“The outlook is mixed. As I said, interest rates are coming down. There still remains some global uncertainties. We have not seen the impact of lower interest rates in Jamaica on the economy so far. So, we continue to be optimistic that as time goes by, we will see a pick-up in economic activity which will lead to even stronger sales and a more resilient investment banking segment,” Zacca explained.

Sagicor Group’s insurance revenue climbed by 14 per cent to $14 billion in the third quarter, but the insurance service result was down by 37 per cent to $1.75 billion due to those higher insurance costs. Sagicor Group was also impacted by a threefold jump in its credit impairment losses which moved from $75.41 million to $331.23 million due to negative credit experiences with some mortgages.

“Inflation over the last couple of years before this [year] has created challenges in our cost structure. We pride in offering our team competitive market rates on their earnings and the inflation required an adjustment to the earnings over two years and that has put some pressure on our costs. Other than that, general inflation pushed up some of our other basic costs,” Zacca explained on the reality of higher costs for the business.

Despite all of these hurdles, Sagicor Group Jamaica will be launching several new digital features in short order to their clients which is part of their overall digital transformation roadmap. Sagicor Bank CEO Chorvelle Johnson-Cunningham told attendees that Sagicor Bank would be launching its new phygital branch at JDF’s Up Park Camp next month which complements its recent New Brunswick branch in St Catherine. They will also be launching a retail client loan portal in short order to allow clients to request loans digitally while also adding card freezing and transaction limits to its eBank platform.

Tracy-Ann Spence, Sagicor Group’s chief investment officer, noted that Sagicor’s eInvest platform will be launching new features such as directives on dividends and refunds from public offerings, allow for joint holders to simply approve authorisation than signing a form and allow for clients to seamlessly transfer money from Sagicor eBank to pay for the public offer. This is the latest announcement after Sagicor Group announced its Sagicor Evolve platform earlier this year.

“We expect that the group across all of its business lines to really offer an omni channel approach to all our customers, to make their interactions with the group regardless of who you’re interacting with extremely seamless. In line with spending, as Mr Zacca has said, billions of dollars in digital transformation and more to come in the future is that of course comes with governance and ensuring that the investments that we make are the right ones, right time and in the right business lines and of course, in line with what the regulators require of us,” said Joanna Bank, EVP and chief strategy officer, on digital transformation.

Total assets increased five per cent over the nine months to $591.40 billion with financial investments at $364.38 billion, loans at $136.57 billion and $28.12 billion in cash. Total liabilities rose six per cent to $486.44 billion with deposits and security liabilities at $277.60 million while equity attributable to shareholders grew three per cent to $102.45 billion, with adjusted shareholders equity with the contractual service margin at $146.98 billion.

SJ closed Thursday at $39.70 which leaves it down 17 per cent in 2024 with a market capitalisation of $155.05 billion. The National Insurance Fund (NIF) bought an additional 6,123,305 ordinary shares on September 20 at $38.01 for a transaction value of $232.75 million. That pushed its holdings in Sagicor Group Jamaica to 66,234,515 ordinary shares to remain as the third largest shareholder with a 1.70 per cent stake. The NIF spent more than $6 billion in September acquiring more shares in numerous JSE listed companies, just before the Bank of Jamaica announced its second rate cut.