RATING DRIVERS
Supporting Factors
- Leading market position in the Jamaica insurance industry and a strong distribution network support a consistent and healthy financial performance
- Overall financial stability supported by continued healthy profitability
- Strong capitalisation level, in excess of regulatory requirement
Constraining Factors
- Protracted low interest rate environment has the potential to challenge SLJ’s Asset Liability Management position
- Significant business and financial exposure to the highly indebted Jamaican economy
Rating Sensitivity Factors
Factors that could lead to an improvement of the rating and/ or Outlook include:
- Improvements in the macroeconomic environment of Jamaica resulting in sustained higher levels of economic growth, i.e., real GDP growth of 2% – 3% sustained over the next 12 – 15 months, or significantly lower debt levels i.e., a debt to GDP ratio of below 75% by December 2022
Factors that could lead to a lowering of the rating and/ or Outlook include:
- Restructuring of the sovereign (GoJ) debt profile leading to a haircut in the principal of government bonds or a more than 30% reduction in the value of these bonds, thereby adversely impacting SLJ’s concentrated long term annuity business
- Deterioration in the financial performance and profitability of SLJ, with a greater than 9% fall in premium income
COMPANY BACKGROUND
Sagicor Life Jamaica Limited (SLJ or the Company), a member of the Sagicor Group of Companies, commenced operations in 1970 as the first Jamaican-owned life insurance company. In 2013, a holding company, Sagicor Group Jamaica Limited (SGJ) was established, and this entity owns 100% of SLJ. Sagicor Life Incorporated (SLI) is the majority shareholder of SGJ and the principal operating subsidiary of Sagicor Financial Company Limited (SFC)[1], which itself owns 49.11% of SGJ. SLJ is considered the main operating subsidiary of SGJ. Following the reorganisation of the Jamaican operations, SLJ was delisted from the Jamaica Stock Exchange and replaced by SGJ.
The Company, operating through 12 branches, markets an extensive range of long-term and equity-linked Individual Life insurance products, Group Life, Group Health, Personal Accident plans and Group Pension plans. Some of the Company’s other services include residential and commercial mortgages, annuities, real estate development and management, investment management and lease financing.
[1] Following the completion of the business combination and strategic acquisition of Sagicor Financial Corporation by Alignvest Acquisition II Corporation, a Toronto-based Special Purpose Acquisition Corporation (SPAC) in December 2019, a new entity, Sagicor Financial Company Limited was incorporated and listed on the Toronto Stock Exchange
Analytical Contacts:
André Joseph
Tel: 1-868-627-8879 Ext. 224
Cell: 1-868-788-4693
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
Cell: 1-868-487-8356
E-mail: [email protected]
Website: www.caricris.com
E-mail: [email protected]
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