CariCRIS reaffirms “highest creditworthiness” rating of Sagicor Life Jamaica Limited

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Issuer/Corporate Credit Rating assigned to Sagicor Life Jamaica Limited (SLJ or the Company) at jmAAA (Local Currency Rating) on the Jamaica national rating scale. This rating includes a credit uplift for implied support from SLJ’s ultimate parent company, Sagicor Financial Company Limited (SFC), through its controlling interest in Sagicor Group Jamaica Limited (SGJ or the holding company). The rating indicates that the level of creditworthiness of this obligor, adjudged in relation to other obligors within Jamaica is the highest.

CariCRIS is has also maintained a stable outlook on the rating. The stable outlook is based on CariCRIS’ expectation that SLJ will realise continued profitability in 2024, albeit at a lower level than 2023, followed by growth in profitability in 2025. Over the next 12 to 15 months, CariCRIS also expects the Company to maintain its overall leading market position in the insurance industry in Jamaica and remain adequately capitalised with the capacity to meet its debt obligations and policyholder liabilities as they come due.

The rating of SLJ reflects the Company's dominant position in the Jamaican insurance market, as it continues to be the largest life insurance provider in the country. In addition, the Company maintains its strong brand equity underpinned by a comprehensive suite of products and services, supported by a robust distribution network. The rating is also supported by SLJ’s overall financial stability, continued healthy profitability, and financial strength as measured by its strong capitalisation level. These supporting factors, however, are tempered by SLJ’s significant business and financial exposure to the Jamaican economy. In addition, CariCRIS continues to view SLJ’s interest rate risk exposure as a key vulnerability in a falling interest rate environment characterised by a moderate degree of uncertainty. In turn, this can challenge SLJ’s Asset Liability Management (ALM) position, thereby adversely impacting its long-term business. Notwithstanding this risk, CariCRIS is of the view that the overall quality of SLJ’s ALM technique and practice is good and has contributed favourably to the ongoing management of its ALM position.

Rating Sensitivity Factors:

Factors that could, individually or collectively, lead to an improvement in the Rating and/ or Outlook include:

• NA

Factors that could, individually or collectively, lead to a lowering of the Rating and/ or Outlook include:

• Annualised return on earning assets (ROEA) below 2%, sustained for 2 consecutive financial periods
• Annualised return on equity (ROE) below 5%, sustained for 2 consecutive financial periods
• A fall in Tangible Net Worth (TNW)/Total Assets to below 20%
• A fall in Total Investment Assets/Policy Liabilities to less than 0.5 times

For more information on SLJ’s rating, please visit www.caricris.com or contact:

Note:

This rating release is transmitted to you for the sole purpose of dissemination through your agency/newspaper/magazine. You may use this rating release in full or in part without changing the meaning or context thereof, but with due credit to CariCRIS. CariCRIS has the sole right of distribution of its rating releases, for consideration or otherwise, through any media, including websites, portals, etc.