Sagicor lays out plan for 2021
…this after 20 consecutive years of higher net profits being broken due to COVID-19

Despite 20 consecutive years of continued higher net profits being broken due to COVID-19, Christopher Zacca, president and chief executive officer (CEO) of Sagicor Group, has pointed to a stronger 2021 for Sagicor Group Jamaica (SJ) which recorded a 12 per cent decline in its net profit attributable to shareholders of $13.78 billion for its 2020 financial year (FY).

Although the pandemic had a sharper impact on broader aspects of local financial companies, SJ's core business lines in individual and group insurance, commercial banking and investment banking performed above expectations with certain one-off accounting measures reducing its bottom line.

“It was a commendable year by the team. The team was magnificent in the most horrendous year that we could have ever imagined. For the out-turn of profit to be down only 12 per cent as noted in our report given all of the one-time impact, impairments and so on, it was a very, very good out-turn,” Zacca told the Business Observer's on SJ's performance in COVID-19.

SJ's revenue declined by nine per cent to $84.57 billion due to a 54 per cent drop in hotel revenues, 112 per cent rise in credit impairment losses and reduction of assets measured at fair value through profit or loss (FVTPL) compared to a gain in the prior FY. However, the group's premium income rose by 13 per cent to $54.8 billion which came as a result of higher sales from the core Sagicor Life (SLL) business and a full year of consolidating Advantage General Insurance Company (AGIC).

Total expenses grew by two per cent to $34.42 billion with only hotel expenses seeing a reduction due to the decline in tourism activity through its 29.31 per cent owned Sagicor Real Estate X-Fund subsidiary. The largest expense arose from the 14 per cent rise in commissions and sales expenses to $6.92 billion as the individual insurance saw net premiums grow by seven per cent to $28.23 billion with more than 600,000 policies in force. The employee benefits segment saw premium income grow by six per cent to $28.04 billion.

“The sales for individual life stood up strongly in the pandemic with expense control and actuarial out-turns being very positive. Given the pandemic, the insurance business did fantastic and managed their claims ratio while keeping pension clients content. December 2020 was a record month for Sagicor Life's individual division,” Zacca revealed. Though insurance benefits incurred grew by 15 per cent to $34.07 billion, SJ experienced a $4.06 billion actuarial reserves release rather than the $8.95 billion strengthening thanks to the positive emergence of the actual experiences versus assumptions in the mortality of their SLL business which had a $10.19 billion change for the individual insurance segment.

Despite SJ's consolidated net profit declining by 71 per cent to $4.48 billion, Zacca adamantly repeated that “readers should take note of the net profit attributable to shareholders since X-Fund isn't a wholly owned subsidiary and doesn't accurately reflect the earnings to shareholders”.

X-Fund experienced a large reduction in its asset base and profitability primarily due to impairment provisions on goodwill and associate, loss of dilution and share of loss related to its Playa Hotels 15 per cent stake. Without the one-time charges from those provisions, SJ's normalised net profit would have been $19.91 billion. Earnings per share for the period closed out at $3.53 versus the $4.01 in the prior FY.

Total assets for SJ increased by seven per cent to $490.69 billion while total liabilities rose by seven per cent to $363.85 billion. Equity attributable to shareholders grew by 17 per cent to $106.38 billion as retained earnings climbed. Sagicor maintained its dividend payments to shareholders in 2020 with $562.9 million to minority shareholders while $2.76 billion was issued in the form of five per cent promissory notes to shareholders owning more than one per cent of the company.

2021 Strategy for the Sagicor Group

With a clear course set to come back stronger, Zacca gave some highlights of initiatives which will be introduced in 2021 to improve group performance.


Sagicor Bank (SBJ) will be engaged in a clear strategy of providing financing to businesses which need support to recover stronger. This has started with SBJ's new SME Resource Centre at its Half-Way-Tree branch along with its business credit card product to enhance cashflow optimisation.

Its payment gateway has begun to get market share and has performed above expectations with delivery business Hugo using it as the backbone of its platform. SBJ will be expanding its bank on the wheels' initiative combined with the roll-out of several new smart ABM's across Jamaica with the remaining ABM's getting a software upgrade. Zacca hinted at one new branch which should be launched at a new real estate development.


Sagicor Investments Limited (SILJ) will be having the largest portfolio of technological upgrades for 2020 among any entity in the Sagicor Group. SILJ will be deploying a new online IPO platform along with a new system to enable clients to do more transactions remotely without the need to contact an advisor as much to execute these deals. Apart from the $3 billion bond arranged for Supreme Ventures Limited, SILJ will be working on several new public offerings in the year as the equity markets begin to respond to renewed interest for investments. This will be the spark needed for SIJL whose corporate finance arm saw its business collapse in the pandemic due to several cancelled deals. The remaining business segments had minimal impacts during the period except for some revaluations of assets.


AGIC will be deploying its mobile app as it continues its digitisation push which will include getting quotations and purchasing certain products online as well. This is complemented by SLL's growth in its online and mobile presence which it will be accelerating in the year to further drive efficiency and strategic optimisation during the year. Apart from growing its pension portfolio which currently stands at 35 per cent of pension assets in Jamaica, the company will be creating more products to suite the various niches of Jamaica that weren't fully covered when the pandemic arrived.

A Sagicor Bank pension clients content location in Kingston
ZACCA...given the pandemic,the insurance business didfantastic and managed theirclaims ratio while keepingA Sagicor Bank pension clients content
BY DAVID ROSE Observer staff reporter

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