Sagicor Group Jamaica Limited (SJ) has started 2024 with a splash, announcing on Monday that its Costa Rican joint venture had acquired Sagicor Panama SA in the latest move towards growing its regional footprint.

The acquisition was consummated on January 1 with Sagicor – Capital & Advice Spain SL, a subsidiary of Sagicor Costa Rica SA, acquiring the Panamanian business from Sagicor Life Inc at book value or equity. Sagicor Panama’s equity value at the end of December 2022 was $5.61 million Panamanian Balboa or J$846.99 million. Sagicor Panama is led by its General Manager Juan Carlos Martinelli and Sagicor Costa Rica by Fernando Víquez Pacheco.

“The acquisition of Sagicor Panama is a key step in our strategic objective of regional expansion. We are confident that our expertise in and commitment to providing insurance solutions will add value to clients across Latin America as we move forward into new markets over the next few years,” said Sagicor Group President and CEO Christopher Zacca in a disclosure which noted it received no objections from Panamanian and Jamaican regulators.

While Sagicor Group’s Costa Rican exploits have been extremely successful, Sagicor Panama’s performance has been notably different when examining its audited financials. The business generated PA$4.86 million in total revenue in 2019 which was accompanied by a PA$798,074 net loss in the same year. Total assets were PA$8.10 million with equity of PA$5.11 million.

In 2022, total revenues were PA$4.30 million with a net loss of PA$1.13 million. Total assets were PA$8.98 million with equity of PA$5.61 million. Over this time frame, it has received additional capital contributions of PA$3.85 million (J$582.09 million) from its parent company. Sagicor Financial Company Limited (SFC) had entered the Panamanian market in 1998 through the acquisition of Atlantic Southern Company’s branch.

However, Sagicor Group’s Chief Technology and Insurance Operations Officer Willard Brown noted that a two-to-three-year plan will be put in motion to put it back in the black. This was reaffirmed by Zacca who is the chairman of Sagicor Costa Rica and had highlighted that the financial conglomerate had been exploring Guyana and other regional markets at its May 2023 annual general meeting. This is on top of the conglomerate building out the Sagicor Investments (Cayman) Limited office in recent times.

When asked by the Jamaica Observer if there were other potential acquisitions that were being considered in the Latin American market, Zacca responded, “We can’t disclose, but we’re constantly looking and talking to various firms, looking at the market in Latin America. We’re going to continue to pursue that strategy and grow in that way.”

Sagicor Group’s last acquisition was executed in April and August 2022 when it acquired Alliance Financial Services Limited and the securities dealer book of Alliance Investment Management Limited. The Sagicor Panama acquisition was first announced in SFC’s third-quarter report.

Sagicor Group Jamaica entered the Latin American markets in February 2013 when it gained approval from the Costa Rican authorities to begin its insurance operations in that market. This was executed through Grupo Sagicor GS, GA in which Sagicor Group has a 50 per cent interest with the remaining stake owned by Capital and Advice SA (C&A), which is part of the Promerica Group. Grupo Sagicor is the parent of Sagicor Costa Rica.

Sagicor Group provided the technical expertise, administration and operating services to the joint venture while Capital and Advice provided the marketing know-how and local support to the business. The business, which began with seven employees and $6.03 billion Costa Rican Colon (US$12.50 million) in capital, has since morphed into a firm with 49 employees and CR$12.76 billion in equity over a decade. The business generated CR$14.25 billion (US$27.44 million) in revenue and had CR$1.92 billion (US$3.69 million) in net profit for the first nine months of 2023. It also paid CR$1.54 billion (US$2.96 million) in dividends during the period.

For Sagicor Group’s nine months, it recorded $82.27 million in share of profit from the Costa Rican joint venture which is minimal relative to the $34.38 billion in insurance revenue and $10.07 billion in net profit attributable to shareholders. These financials are the first time Sagicor Group has reported using IFRS 17 compared to 2022 when it used IFRS 4.

Sagicor Group’s total assets were J$541.66 billion with $334.22 million in financial investments and $121.56 million in loans and advances. Total liabilities and equity attributable to shareholders were $450.16 billion and $89.15 billion, respectively. Sagicor Group’s 2023 audited financial statements are due by February 29.

Sagicor Group’s stock price was down 16 per cent in 2023 from $56.91 to $47.75 which left it with a market capitalization of $186.49 billion. This made it the largest company on the JSE for the second year in a row where the JSE Index and Combined Index were valued at $1.68 billion and $1.87 billion, respectively.

– 1 Panamanian Balboa (PAB) = J$151.08980.

– 1 Costa Rican Colon (CRC) = J$0.28929.