Sagicor profit falls 40 per cent in second quarter as Hurricane Melissa claims weigh on insurance book

Sagicor Group Jamaica Ltd reported net profit of $2.85 billion for the second quarter ended June 2026, down 40 per cent a year earlier, as Hurricane Melissa-related claims and the absence of one-off gains compressed returns.

The results were “resilient”, stated Chairman Peter Melhado and President and CEO Christopher Zacca in the directors’ report. It came “against abackdrop of elevated Hurricane Melissa-related provisions and challenging market conditions”.

For the full six-month period, net profit fell 44 per cent to $4.87 billion from $8.73 billion, while earnings per share dropped to $1.25 from $2.24. Return on equity halved to 8.0 per cent from 16 per cent. Core earnings, which strip out market-related impacts and non-recurring items, declined 23 per cent to $6.18 billion.

The damage was concentrated in the insurance book. Insurance service expenses surged 43 per cent to $30.78 billion, driven by Hurricane Melissa-related claims in the short-term insurance segment, where net profit collapsed 60 per cent to $0.66 billion. The long-term insurance segment posted a 33 per cent decline in net profit to $3.66 billion, weighed down by higher one-off charges and adverse market conditions.

The commercial banking arm provided a counterweight. Sagicor Bank Jamaica delivered net profit of $2.26 billion, up 38 per cent, fuelled by higher net investment income and a sharp reduction in credit-impairment losses. The bank originated $22.15 billion in new loans during the half and grew its deposit base to $217.03 billion from $202.86 billion at the end of December.

Reinsurance recoveries provided partial relief, with net reinsurance income swinging to a positive $4.29 billion from a $1.80 billion expense in the prior-year period — evidence that the group’s catastrophe-reinsurance programme absorbed a meaningful share of Melissa’s impact.

The contractual service margin (CSM), a forward-looking measure of unearned profit embedded in Sagicor’s insurance contracts, grew 7.0 per cent to $3.30 billion, signalling that the pipeline of future earnings remained intact despite the near-term drag. Adjusted stockholders’ equity, which includes the CSM, rose to $166.35 billion.

Total assets expanded 11 per cent year-over-year to $724.87 billion. All regulated entities continued to exceed minimum statutory capital requirements, although Advantage General Insurance Company Limited’s minimum capital test ratio declined to 181.7 per cent from 206.8 per cent, reflecting the hurricane-related strain.

business@gleanerjm.com