ANNUAL REPORT 2015 the HINKSONS Port of Spain, Trinidad and Tobago (Cover Photo)
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ANNUAL REPORT 2015 THE HINKSONS Port of Spain, Trinidad and Tobago (Cover Photo) There is that one big personality that most reflects the passion of a family. Ana Hinkson is a five year-old Trinidadian who wasn’t meant to be the focus of our story, but who best represents the loving moments between parents and their children, and siblings, that Sagicor values. Whether it’s the tenderness shared here with her brother Samuel, or the total submission of the family dog to her assertive commands, we were honoured to enter a quiet little sanctuary in Port-of-Spain, with the Hinksons, on an otherwise hectic Carnival Saturday in Trinidad. Michelle and Sean Hinkson are the adults in this story. Their four children keep them busy, but they always find time for special moments on the Savannah. Sagicor came highly recommended to them as a young couple, and when they decided to discuss their goals with an advisor, they started with their properties. Michelle explained that they were able to secure a mortgage, and loans to renovate and maintain their growing investments. The Hinksons also have life insurance with Sagicor, so they can provide for their family in the future. They are saving for their children’s academic goals, too. “We love these children, and one of the things that drives us is making sure they get the best education,” adds Michelle. Levi, Shay, Samuel and Ana will grow up understanding the importance of moments like these with family, and also with the added security of wise financial guidance. Sagicor Financial Corporation MEET THE REAL PEOPLE BEHIND OUR SUCCESS. OUR CLIENTS. Throughout this Annual Report, you will see how our clients’ lives are filled with moments that range from life-changing events to everyday occasions, and everything else in between. They remind us of how precious and diverse life can be for each of us. Moments like these add up, and for 175 years, Sagicor has been committed to turning them into years of stability and growth for our clients. Sagicor Financial Corporation OUR VISION To be a great company, committed to improving the lives of people in the communities in which we operate. CONTENTS 6 About Sagicor 10 Chairman’s Statement • Financial Highlights 16 Corporate & Social Responsibility 40 Human Capital Report 48 Operating & Financial Review 64 Board of Directors 70 Corporate Governance 84 Executive Management 92 Index of Financial Statements • Financial Statements • Notes 214 Shareholder Information • Advisors & Bankers • Offices ABOUT SAGICOR THE MURPHYS St. Philip, Barbados Sometime in July of 2013, the island of Barbados passionately rallied around the story of young Zane Murphy. Zane suffered an accident that resonated with the wider Barbadian community. Friends and strangers from across the island heard his story after an initial call to donate blood, and Barbadians responded overwhelmingly. This led to a growing online community, fed by concern for the young and energetic symbol of hope that Zane represents, and served by a mother who recognised the need from a concerned public to share the Murphys’ burden. Four years later, there’s still a bit of magic to Zane’s progress. To see his energy as any other five-year-old is true motivation. His passion for farm life and a doting family signals a blessed future for this young boy. Today, for Zane’s parents, Mark and Dr Maddy Murphy, and big brother Matthew, farm life continues to be a lesson in moments that matter most. As a lecturer in Public Health at the University of the West Indies, Maddy understands the importance of informed decision-making. So when the time came for her own family’s medical care, she turned to Sagicor. “Sagicor helped us make informed decisions so we wouldn’t have any surprises,” says Maddy. “So much so that when we’ve had to use our insurance overseas for Zane, the hospitals commented on the ease of working with our insurance company.” Knowing their family’s ongoing medical needs will be covered makes it easier for the Murphys to plan for tomorrow. “We’re confident that Sagicor is looking out for the best interest of myself and my family. I’ve personally seen this in action,” adds Maddy. Sagicor Financial Corporation ABOUT SAGICOR Sagicor is a dynamic, indigenous Group which has been redefining financial youth development and sports, to a number of organisations and institutions. services in the Caribbean. Following a carefully crafted business strategy, Sagicor continues to provide significant support for the prevention of the company transformed from a local single-line life insurance company to non-communicable diseases by promoting healthy living, and improving a financial services group with a solid regional base, before expanding into access to and facilities for health-care in the region. Sagicor supports the international financial services market. education at the primary, secondary and tertiary level, and sponsors a number of adult education and development activities. After the company demutualised in 2002, Sagicor Financial Corporation was formed as a publicly-listed holding company. The word Sagicor means “wise As we move forward through these challenging times in the economic life of judgment”, and reflects the quality of the financial advice and services we our region and the rest of the world, Sagicor’s core business strategies will offer. Sagicor now operates in 22 countries in the Caribbean, the USA and continue to provide a wide range of financial products and services, while Latin America. committed to our vision, “To be a great company, committed to improving the lives of people in the communities in which we operate.” For 175 years, Sagicor’s business has been based on long-term relationships with its customers, employees, and communities, who entrust us with their SAGICOR MILESTONES financial well-being. Our name and reputation draw on the strength, stability In 2015, the Sagicor Group of Companies marked a very special moment - and financial prudence that are our heritage, and this identity defines the 175 years of financial service to the Caribbean and beyond. Our company flexibility that wise financial thinking can bring to our customers throughout began its journey in 1840 and throughout these pages (as shown below) we their lives. Through local expertise and in partnerships with world-class trace the emergence of the Barbados Mutual Life Assurance Society, our asset managers, reinsurers, together with sound risk management practices, expansion across the Caribbean and the development of the Sagicor Group Sagicor is able to provide wise financial advise, and continue to meet the of companies, a dynamic, global financial services Group. needs of our customers now and in the future. It is Sagicor’s view that the entire business of wealth-creation and protection is about social investment. For many decades, Sagicor provided financial support and voluntary assistance, primarily in the areas of health, education, 1840 The establishment of the Barbados Mutual an era of economic turmoil. The first policy was Life Assurance Society, which thrived amidst purchased on November 24, 1840. 6 2015 Annual Report Sagicor Financial Corporation CELEBRATING 175 YEARS Everything can change in a second. It’s a good thing we’ve been around for 5.5 billion of them. Sagicor is celebrating 175 years of helping you enjoy the most precious moments, and get through the more difficult ones. As we move into the future, let’s work together to turn those seconds into years and decades of stability and growth. 1900 The Barbados Mutual Life Assurance Society was established throughout the British Caribbean. the only indigenous life insurance company By 1900, (BLMAS) had 9 branches in the Caribbean. 2015 Annual Report 7 CHAIRMAN’S STATEMENT THE SAULS Soufriere, St. Lucia Petra and Zephaniah have their hands full with seven-year-old Lanna Niahlie and two-year-old Alazne Jewel. However, no matter how busy things get for the Sauls and their daughters, they take time to appreciate life’s blessings. “With two awesome girls, I find myself living in the moment, having fun at home or taking them to the beach, which they love,” says Petra. Being part of the Sagicor family has given the Sauls peace of mind for their future. “We have a wonderful Sagicor Advisor, and have been able to rely on Sagicor to give us a mortgage for our home,” states Petra. “In addition, I want to ensure that our children are better off than I was growing up, and that I can secure a good financial future for them. I believe Sagicor can help me achieve this.” Sagicor Financial Corporation CHAIRMAN’S STATEMENT the period at US $322.2 million, up from US $307.2 million in the prior year, representing an improvement of 4.9%. Fees and other revenue amounted to US $109.1 million, compared to US $83.3 million in 2014, an improvement of US $25.8 million or 31.0 %. Net investment income and Fees and other revenue include the impact of the RBC Royal Bank’s operation in Jamaica, which was acquired on June 27, 2014. Total benefits incurred from continuing operations held fairly steady at US $552.9 million, compared to US$542.2 million in 2014. Expenses (including agents’ and brokers’ commissions) increased to US $427.7 million, compared to US $385.9 million for the prior year, an Stephen McNamara, CBE increase of US $41.8 million, or 10.8%. The increase in expenses reflected Chairman expenses incurred with the inclusion of the operation and integration of the RBC Royal Bank’s Jamaica banking operation for the entire year, compared I am pleased to report on the 2015 financial performance of the Sagicor to six months in 2014.