Sagicor Financial TSE: SFC reported second-quarter core earnings of $34 million, up from $25 million in the first quarter, as insurance experience improved and investment portfolio performance strengthened. Net income attributable to shareholders reached $87 million, exceeding core earnings as favorable interest-rate movements and equity-market performance supported results.
“Our core earnings returned to our target levels as insurance experience was broadly in line with our expectations,” President and CEO André Mousseau said. He added that market volatility in asset prices worked in the company’s favor during the quarter.
Annualized core return on equity was 13.6% in the second quarter, in line with management expectations. The company also reported $44 million in new-business contractual service margin, or CSM, across its operating segments.
Segment Results
Sagicor Canada generated $17 million of new-business production and $11 million of new-business CSM. Core earnings attributable to shareholders were $27 million, an 8% increase from a year earlier, driven by higher expected investment earnings.
Net income in the Canadian business was $70 million, aided by lower interest rates and strong equity returns affecting its universal life operations. Net CSM declined 2% from the prior quarter to $548 million in U.S. dollar terms because of Canadian dollar devaluation, though it increased marginally on a constant-currency basis.
Sagicor Life USA reported $284 million in new-business production, which management said was in line with expectations. Core earnings attributable to shareholders were $6 million, down year over year due to insurance experience losses in a legacy life block, compared with insurance gains in the second quarter of 2025. Net income was also $6 million, as market experience and other non-core items were approximately neutral.
Sagicor Jamaica recorded 13% year-over-year net premium growth, supported by policy renewals and new business. Sagicor’s share of the Jamaican unit’s core earnings was $10 million, reflecting higher expected investment earnings from improved interest margins and growth in commercial banking and investment portfolios. Net CSM rose 3% sequentially to $308 million, including $14 million of new-business CSM.
Sagicor Life generated $116 million in net premiums, supported by single-premium annuity growth. Core earnings were $14 million, aided by favorable insurance experience in its short- and long-term businesses. Net income totaled $25 million, primarily due to favorable interest-rate-related market movements. Net CSM fell 7% sequentially to $248 million as organic growth was offset by reinsurance contract modifications.
At the head office, other operating companies and adjustments segment, core costs attributable to shareholders were $22 million, unchanged from the prior quarter. Total reported costs in that segment were $23 million.
Capital Position, Buybacks and Dividend
The company said it remained well capitalized, reporting a group LICAT ratio of 134% and a financial leverage ratio of 27.4%. Book value per share rose to $7.65, or C$10.87.
During the quarter, Sagicor repurchased 500,000 shares for just under $3 million, taking advantage of what Chief Financial Officer Kathy Jenkins described as softness in the company’s trading price later in the period.
Sagicor also declared its 27th consecutive quarterly dividend since listing on the Toronto Stock Exchange. The quarterly dividend remains at $0.075 per share, or $0.30 on an annualized basis, marking the third payment at the higher level.
Legacy U.S. Life Review and Growth Plans
During the question-and-answer session, Mousseau said the majority of unfavorable insurance experience in the U.S. operation related to legacy life insurance business that Sagicor no longer writes. The affected business includes term policies issued from 2016 through 2020, as well as older blocks.
The company is conducting a detailed review of mortality assumptions and may strengthen reserves for the block in the third quarter. Mousseau said any adjustment could flow through either CSM or equity, depending on the specific cohort involved.
He said newer annuity business has generally performed in line with the company’s economic expectations. Sagicor previously adjusted assumptions related to early policy renewals, and observed experience is now more consistent with those updated assumptions.
While U.S. annuity production during the first half was below the prior-year level, Mousseau said the company is maintaining pricing discipline in an increasingly competitive environment rather than accepting lower returns to expand the balance sheet. He said Sagicor still expects to produce well above $1 billion in the U.S. business this year.
Mousseau also pointed to AM Best’s recent upgrade of Sagicor’s U.S. financial-strength rating to A, which he said could create additional distribution opportunities as the company seeks to accelerate growth under new leadership.
Caribbean Combination May Add Near-Term Costs
Sagicor continues to pursue the combination of Sagicor Life and Sagicor Group Jamaica Limited as part of its Caribbean transformation plan. The company is targeting a fourth-quarter closing, though Mousseau said the transaction could extend into the first half of next year if it is not ready to close by Sept. 30.
The company expects one-time charges and investments related to the transformation to begin appearing in the third and fourth quarters if the transaction is delayed. Mousseau said the costs are intended to support long-term value creation, including process re-engineering and technology consolidation.
Management reiterated its expectation for a path toward a 14% return on equity target in 2027 and 15% in 2028 as the strategic initiatives and Caribbean combination progress. Some benefits may emerge this year and more are expected in 2027, while larger technology and process initiatives are expected to extend into 2028.
About Sagicor Financial (TSE:SFC)
Sagicor Financial Company Ltd. TSX: SFC is a leading financial services provider with over 185 years of history in the Caribbean, over 90 years of history in Canada, and over 70 years of history in the United States. Sagicor offers a wide range of products and services, including life, health, and general insurance, banking, pensions, annuities, investment management, and real estate. Sagicor's registered office is located at Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda, with its principal office located at Cecil F De Caires Building, Wildey, St.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Sagicor Financial, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Sagicor Financial wasn't on the list.
While Sagicor Financial currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Robotics and automation are rapidly becoming essential infrastructure across healthcare, manufacturing, logistics, and many other industries.
"Physical AI" is coming to the United States, and there are four ways that investors can gain exposure to this new robotics revolution. Plus, learn which seven companies are most positioned to benefit as intelligent robots enter the workforce.
Get This Free Report
