SAGICOR Financial Company Limited is pressing ahead with a major Caribbean merger and digital transformation strategy despite first-quarter losses and heightened market volatility, as the insurer prepares to consolidate regional operations under a new Jamaica-listed holding company.

“It’s going to unlock a tremendous amount of value, and we have conviction that our employees and team members are going to feel it. We’re very energised by this already. Our policyholders will feel it as we’re able to make investments with this critical mass in digital technology that will make it easier and easier to interface with us throughout the Caribbean,” said SFC President and CEO Andre Mousseau at the company’s shareholder meeting held on Wednesday in Barbados.

SGC is the proposed vehicle to complete the merger of Sagicor Group Jamaica Limited (SGJ) and Sagicor Life Inc. (SLI). The new company will become the holding company for SFC’s Caribbean operations and will be publicly listed on the Jamaica Stock Exchange (JSE). The sole assets of this entity will be SGJ and SLI, which act as holding companies for Sagicor’s Caribbean operations.

“We are forming a new company. So, Sagicor Group Caribbean only exists notionally today as an idea and perhaps a company that’s been formed in the lawyer’s office but doesn’t have operations yet,” Mousseau said in his presentation.

Prior to the proposed merger, Sagicor’s two main Caribbean subsidiaries effectively operated in distinct markets with unique approaches. According to the SFC CEO, the combined group would work together on common platforms and shared practices while benefiting from a technology-led focus. This includes streamlining and digitising operations, which management said should improve customer experience while allowing employees to focus more on revenue-generating activities rather than administrative work.

The combined entity had US$6.9 billion in total assets and US$1.3 billion in total revenues on a pro-forma basis for the 12 months ending September 30, 2025. Both SGJ and SLI had US$7.11 billion in combined assets, US$721.90 million in insurance revenue, and US$420.09 million in net investment income in December 2025.

While the merger is expected to be completed by the fourth quarter, SFC has already begun strengthening its internal structure to lead the integration efforts. The company recruited former Scotia Group Jamaica Limited CEO David Noel in September 2025 as SFC’s chief operating officer for the Caribbean.

“He’s [Noel] become the chief transformation officer of the pro-forma organisation led by Chris Zacca. So, that certainly has become a big part of his mandate,” Mousseau noted.

Even as SFC pushes ahead with the regional integration effort, the company’s first quarter was pressured by market volatility and increased Hurricane Melissa-related insurance provisions. SFC reported a consolidated net loss of US$28.98 million, with US$34.44 million attributable to SFC shareholders. Although Sagicor Jamaica’s consolidated net profit declined 54 per cent to US$11.88 million, it was the only SFC segment that reported a net profit for the quarter. The increased Hurricane Melissa provisions at Advantage General Insurance Company Limited (AGIC) and unrealised fair value losses were the underlying drivers of the reduced earnings during the quarter.

“Seeing through this noisy quarter, we continue to make excellent progress on our strategic initiatives to drive return on equity expansion and future growth, and we reiterate our 2027 and 2028 targets for 14 per cent and 15 per cent core returns on shareholders’ equity, respectively,” the SFC CEO said in the Q1 press release.

Sagicor Group Jamaica saw a seven per cent rise in net premiums to US$99.7 million for the first quarter. At the standalone level, SGJ’s insurance service result was down 36 per cent to $1.66 billion due to the $0.77 billion AGIC provisions. Although capital gains were lower year on year, the credit impairment provisions were down while net interest income went up. Higher asset taxes and other operating expenses resulted in consolidated net profit of $1.87 billion, with $2.01 billion attributable to shareholders.

SGJ had $717.26 billion in total assets, with $423.07 billion in financial investments and $37.82 billion in cash. SGJ’s equity attributable to shareholders was $112.41 billion, with the figure rising to $160.51 billion after accounting for future profits from the CSM (contractual service margin).

Although SGJ CEO Christopher Zacca previously noted that there would be an additional public offering (APO) this year, the SFC CEO noted that the equity raise is not specifically for a purchase, but to support the overall SGC combination.

“I think there is a process that will be undertaken this year to explore raising third-party capital. Sagicor Financial is pleased to stand behind and does intend to invest capital additionally and incrementally into the combined group so that it can be robustly capitalised on its own and well positioned for growth,” Mousseau said on Wednesday.

SFC had US$25.16 billion in consolidated assets which was mainly composed of US$19.25 billion in financial investments. The equity attributable to shareholders was US$1 billion, which increased to US$2.1 billion after including the CSM. This translated to a book value of US$15.47 or CA$21.57.

Despite SFC reporting a consolidated net loss, its core earnings to shareholders was US$24.9 million after removing the market volatility observed in Q1. The SLI business was also affected by certain one-time costs to prepare for the merger.

“It would be our intent to put Sagicor Bank (Barbados) into the mix there eventually but notionally, the transaction has been structured right now as the coming together of the two life insurance holding companies,” Mousseau responded on the future plans for the Sagicor Caribbean business.

SFC’s stock price slid five per cent on Thursday to CA$8.78 during intra-day trading, following the publication of the Q1 financials. The stock traded at CA$8.45 on Tuesday. Sagicor Group Jamaica will have its annual general meeting today at 3pm by the Sagicor Auditorium in New Kingston.

SFC’s board declared a dividend of US$0.075, totalling US$10.21 million, to be paid on June 17 to shareholders on record as of May 27. This represents an 11 per cent increase over the same amount paid last year.

JMMB Group Limited (JMMBGL) should receive US$2.50 million as its dividend payment. JMMBGL is the largest SFC shareholder with a 24.44 per cent stake and three directors on the board.

“We’re very intensely involved in completing the merger of our Caribbean businesses, and that would take the merger, integration and growth of those businesses. That will continue to take a lot of our attention through this year and portions of next year,” closed Chairman Mahmood Khimji.