Market gains drive Sagicor Group’s earnings
A strong rebound in the financial markets and repricing of insurance products contributed to a 60 per cent improvement in Sagicor Group Jamaica Limited’s (SJ) consolidated net profit which grew from $3 billion to $4.79 billion.
The financial conglomerate spent a net amount of $13.85 billion on its financial investments during the second quarter (April to June) as global financial markets experienced heightened volatility from developments taking place by the new USA administration under President Donald Trump.
The subsequent rebound and record highs in international markets gave Sagicor Group the opportunity to capitalise on $585.25 million in realised gains and benefit from $1.66 billion in unrealised gains on its asset portfolio. This contrasts with the $30.28 million in realised gains and unrealised loss of $360.64 million in Q2 2024. These market gains plus increased interest income on its loans and investments pushed Sagicor Group’s net investment income up 47 per cent to $8.92 billion.
Sagicor Group Jamaica also experienced a 15 per cent rise in insurance revenue to $15.13 billion as the insurance segment sold more group health and life products and benefited from a US$10.7-million contractual service margin release during the quarter. A favourable claims experience related to the marginal change in the insurance service expense and reinsurance contracts resulted in the insurance service result rising 96 per cent to $3.53 billion.
“Short-term business earnings continued its growth momentum in the second quarter of 2025 as compared to the second quarter of 2024 that saw a 21 per cent growth in health insurance net premium, improved margins resulting from product repricing, and release of reserves. Long-term business also saw growth in earnings contribution as compared to the same period in 2024 with a 5 per cent growth in net premium and favourable insurance experience,” stated Sagicor Financial Company Limited (SFC), Sagicor Group’s parent company, in its management discussion and analysis.
SFC Chief Financial Officer Kathy Jenkins also mentioned on SFC’s earnings call on Thursday that the Jamaican business had improved margins from the repricing on short-term products which are less than one year. She also highlighted that there was strong net premium growth across most business lines.
Sagicor Group’s fee and other revenue line item also improved 13 per cent to $4.99 billion while its joint venture in Panama and Costa Rica contributed $254.82 million in share of profit. Despite a four per cent rise in other operating expenses to $8.17 billion, Sagicor Group Jamaica’s profit before tax grew 65 per cent to $6.23 billion. Net profit attributable to shareholders increased 60 per cent to $4.76 billion with earnings per share of $1.22.
For the overall six months period, Sagicor Group’s insurance revenue grew 15 per cent to $29.43 billion with the insurance service result rising 116 per cent to $6.12 billion. The prior’s years net insurance service result had a one-off adjustment to the actuarial models for insurance contracts which resulted in a higher loss on onerous contracts totalling US$5.5 million and an increase in staff compensation.
Sagicor Group’s realised capital gains improved 485 per cent to $1.50 billion with unrealised capital gains of $4.36 billion compared to an unrealised loss of $1.94 billion in the prior period. Net investment income increased 75 per cent to $19.15 billion for the six months. Sagicor Group invested a net amount of $30.15 billion in financial investments for the six months period compared to $12.17 billion in 2024.
An improvement in fees and other revenue along with a six per cent rise in other operating expenses left Sagicor Group with a profit before tax of $11.57 billion, a 109 per cent rise compared to the $5.53 billion in the comparative period. Consolidated net profit increased 120 per cent to $8.83 billion with net profit attributable to shareholders at $8.73 billion. The half year earnings almost exceeded the consolidated net profit of $9.05 billion in 2024.
Sagicor Group’s asset base improved nine per cent over the six months period to $652.70 billion as financial investments grew ten per cent to $395.69 billion while loans and leases improved nine per cent to $150.14 billion as $20.48 billion in new loans were written during the period. The group’s cash resources ended the period at $36.74 billion.
Total liabilities grew ten per cent to $540.26 billion as deposits and security liabilities rose 12 per cent to $319.59 billion while insurance contract liabilities increased five per cent to $168.65 billion. Consolidated equity improved eight per cent to $112.44 billion with equity attributable to shareholders at $110.28 billion. However, adjusted equity attributable to shareholders which includes the CSM rose six per cent to $155.53 billion.
SJ’s stock price closed Thursday at $39.94 which left the stock down one per cent in 2025 with a market capitalisation of $155.98 billion. The trailing 12-month EPS of $3.59 meant that SJ had a price to earnings ratio of 11.13 times.
Sagicor Group President and CEO Christopher Zacca acquired an additional 388,616 ordinary shares while Chief Financial Officer Andre Ho Lung acquired 113,617 ordinary shares over the six-month period. Willard Brown, Karl Williams, Chorvelle Johnson Cunningham, Tara Nunes and several other executives increased their Sagicor ownership during the period.
“Despite mounting macroeconomic risks, especially on the global front, several positive indicators support the group’s cautiously optimistic view. We continue to monitor the risks and opportunities as we position ourselves for even more growth,” Zacca closed.