SAGICOR INCOME DROPS BACK, FX HITS LLOYD’S BUSINESS

Caribbean insurance group Sagicor has posted group net income of $40.4m for the first six months of the year, down from $45.4m in the same period last year, on revenue of $587.0m, up 27% from $461.7m in H1 2008. Caribbean operations, including Jamaica and the Netherland Antilles, posted net income of $38.9m, fractionally down from the $39.8m recorded in H1 2009. However, Sagicor at Lloyd’s , which includes property-casualty syndicate 1206 and life syndicate 44, posted a foreign exchange loss of $9.4m, pushing the bottom line of the international division into a loss of $4.1m. Sagicor noted that the FX loss was an accounting entry only, “and has no cash flow or economic impact on the syndicate”. Sagicor noted that it was experiencing a continuing reversal of previously booked mark-to-market losses, with an unrealized net gain of $26.1m in H1 comparing to a loss of $27.7m in the same period last year. The insurer noted that the economic environment in the Caribbean was becoming “increasingly challenging as the region began to experience the impact of the global recession”. Sagicor observed that it was required by law to invest “substantially” in the bonds and other instruments issued by the Governments of the countries in which Sagicor operates. With both Jamaica and Barbados suffering downgrades on sovereign debt, Sagicor had seen its rating changed from triple B plus to triple B with a negative outlook. Sagicor said that “we expect the region to continue to be challenged by economic conditions for the remainder of 2009 and perhaps well into next year”.