Stronger Together 2020 ANNUAL REPORT Stronger Together | 2020 Annual Report OUR VISION To be a great company committed to improving the lives of people in the communities in which we operate. 1 TABLE OF CONTENTS FINANCIAL HIGHLIGHTS 2 SAGICOR GROUP CHAIRMAN’S REVIEW 5 SAGICOR GROUP PRESIDENT & CHIEF EXECUTIVE OFFICER’S MESSAGE 7 BOARD OF DIRECTORS 10 EXECUTIVE MANAGEMENT 16 GROUP ORGANISATIONAL CHART 22 CORPORATE & SOCIAL RESPONSIBILITY 24 HUMAN CAPITAL REPORT 39 INNOVATION & TECHNOLOGY 45 MANAGEMENT DISCUSSION & ANALYSIS 46 INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS 130 SHAREHOLDER INFORMATION 308 OFFICES 310 2 FINANCIAL HIGHLIGHTS SHAREHOLDERS’ RETURNS NET INCOME 1 COMMON DIVIDENDS BOOK VALUE PER SHARE3 7.59 7.81 8.50 8.83 7.66 (4) 87 37 62 60 33 15 15 15 14 2020 20192 2018 2017 2016 2020 20192 2018 2017 2016 2020 2019 2018 2017 2016 1 from continuing operations 2 2020 2019 2018 2017 2016 2 before Alignvest Acquisition II Corporation transaction costs 3 3 Basic earnings per share (2.4¢) 57.5¢ 51.7¢ 88.7¢ 84.4 under the Alignvest transaction, Sagicor Financial Corporation Limited common shares not purchased for cash, were exchanged for common shares of Sagicor Financial Company Ltd on an exchange 1,2 ratio of one Sagicor Financial Company Ltd. common share for 4.328 of Sagicor Financial Corporation Limited common shares (“Exchange Ratio”). This exchange ratio has been used to convert the 2018 Return on shareholder’s equity (0.3%) 10.50% 6.20% 11.30% 12.30 and prior years outstanding shares to the Sagicor Financial Company Ltd equivalent. GROUP FINANCIAL POSITION ASSETS 1 OPERATING LIABILITIES EQUITY & DEBT CAPITAL (TOTAL CAPITAL) 9,266 8,729 7,308 6,805 6,532 7,136 6,461 5,700 5,464 5,341 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 2,128 2,266 1,622 1,352 1,190 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 Debt to Capital 22.2% 22.8% 30.2% 30.5% 33.2% 1 from continuing operations MCCSR 252% 253% 234% 258% 249% FINANCIAL HIGHLIGHTS 3 GROUP RESULTS 1 NET INCOME 1 REVENUE BENEFITS 1,221 1,117 765 659 560 (15) 147 96 106 108 1,878 1,867 1,386 1,219 1,134 2020 2019 2018 2017 2016 2020 20192 2018 2017 2016 2020 2019 2018 2017 2016 1 from continuing operations 2 from continuing operations (before Alignvest Acquisition II Corporation transaction cost) SEGMENT RESULTS SAGICOR LIFE INC - NET INCOME 1 SAGICOR GROUP JAMAICA - NET INCOME 1 SAGICOR USA - NET INCOME 1 49 59 47 64 65 38 124 111 95 90 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 (27) 35 18 13 10 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 Revenue 523 533 340 421 411 Revenue 632 735 586 590 524 Revenue 679 562 421 159 149 Assets 2,279 2,116 2,008 1,953 1,928 Assets 3,455 3,482 3,104 2,836 2,674 Assets 3,383 2,842 2,293 1,982 1,901 1 from continuing operations 4 Timothy Hodgson SAGICOR GROUP CHAIRMAN Stronger Together | 2020 Annual Report 5 SAGICOR GROUP CHAIRMAN’S REVIEW Dear Shareholders: critical oversight and strategic direction needed Corporation Limited for nearly a decade. We also during such challenging times. During the year, the welcomed Mr. Gil Palter and Mr. Jonathan Finkelstein Our 2020 results have been dominated by COVID-19, Board provided guidance on business initiatives, ever to the Board. In September, we mourned the sad one of modern history’s most challenging health mindful of the need to balance shareholder value passing of Mr. John Shettle Jr., a board member since and economic crises, and we expect the challenges creation and capital allocation decisions. 2008. We deeply appreciated John’s years of service to continue into 2021. The pandemic affected the and significant contribution to Sagicor’s development, tourism dependent Caribbean regions in which we As the pandemic’s impact became more quantifiable, and especially his work on various committees. operate, just as it impacted economies around the we pursued digital business transformation strategies world. In the face of this unprecedented disruption, that could benefit our service offerings and enhance On behalf of the Board of Directors, I would like Sagicor remained steadfast in its objectives, and our workflows. We also encouraged leadership to thank our policyholders, our customers, our adaptive in its ways of doing business. Drawing upon at all levels of the organisation to help develop employees, our advisors, our shareholders and 180 years of experience as a market-leading financial strategies for helping our stakeholders to weather our many business affiliates for the support, services provider with a strong capital position, the pandemic storm – employees, customers policy commitment and trust you have placed in Sagicor. Sagicor demonstrated its resilience, as well as its holders, and the communities we serve. Sagicor used We will continue to do our best to consistently and social responsibility. its financial strength in ways that not only supported effectively serve your needs. To our Group President stakeholders, but that could also position the and Chief Executive Officer, Mr Dodridge Miller, The pandemic profoundly changed the way we company to be stronger once the pandemic is safely and his executive team, the Board expresses its interact with each other and how we do business. It behind us. confidence in your tireless work to fulfill Sagicor’s forced us to adapt innovative strategies to accelerate ongoing purpose. To the Sagicor family, the Board is business initiatives. Our customers depended on us As we looked forward, we embarked on a full multi- grateful for your continued commitment to assisting and in response, we introduced new products, digital year strategic review and planning exercise with your communities, especially in the face of natural technologies for broader engagement, and simpler management. The decisions we adopted were driven disasters and the ongoing COVID-19 pandemic. ways of doing business. Sagicor continues to use by our strong risk culture, as well as our focus on its broad platform to support its communities. We profitable growth and sustainability. Our Governance I firmly believe we will come out of this crisis stronger willingly shoulder our responsibility as a corporate and Nominating Committee conducted their annual together. Stay safe and stay well. leader in the Caribbean and as a leading indigenous review of executive compensation and succession financial institution. plans to ensure we have the proper framework to Yours truly attract and retain the talent needed to execute our The past year marked our first full year as a Toronto strategic vision. On the matter of board diversity, Stock Exchange (TSX) public company, and it was we are a leader in terms of ethnic and geographic also my first year as Chair of the Board. I owe a diversity on our board. At the same time, we are also debt of gratitude to my fellow Board members and committed to increasing the gender diversity on Timothy Hodgson the entire management team at Sagicor for their our board. Chair of the Board of Directors dedication and commitment during the burgeoning pandemic. Our open and transparent discussions, The Board experienced some changes to its directors facilitated by a transition to virtual meetings, allowed during the year. The Board reappointed Mr. Monish us to quickly pivot, and continue providing the Dutt, having served on the Board of Sagicor Financial 6 Dodridge Miller GROUP PRESIDENT & CHIEF EXECUTIVE OFFICER Stronger Together | 2020 Annual Report 7 SAGICOR GROUP PRESIDENT & CHIEF EXECUTIVE OFFICER’S MESSAGE Dear Shareholders: 2020 in Review positive impact asset optimisation efforts in our Sagicor Life segment. However, overall, the Group The year 2020 was a challenging one for the world Sagicor entered 2020 in a position of financial recorded a loss for the year to shareholders of $4 as it was for Sagicor. A Global pandemic rocked strength, following the capital raised from our million, driven by lower interest rates, strengthening the world from very early in the year and the social December 2019 listing on the Toronto Stock of actuarial reserves for forward looking assumptions and economic upheaval quickly raced around the Exchange. While it is still too early to assess the full and increased credit losses. From a balance sheet globe. At Sagicor, we successfully leveraged our impact, our new stock exchange listing exposed perspective, we ended the year with assets of $9.3 more than 180 years of experience to ensure first Sagicor to a more liquid equity capital market and billion, an increase of $500 million, as we continue the safety of our staff and customers, and secondly brought in over $450 million of additional capital to focus on growth and internal capital optimisation. the maintenance of high-quality service to all of and new long-term investors to Sagicor. Going We believe we are well positioned to execute our our stakeholders. We demonstrated flexibility and forward, we are committed to building our presence growth plans with a strong foundation of financial, agility in our ability to efficiently pivot into a digital in these new markets and engaging new investors, operational and risk management strengths. world, successfully transitioning and adapting our while leveraging our brand leadership and reputation approach to doing business in each of our markets. in our home markets, as we execute our purpose- Key Business Segments: The COVID-19 pandemic accelerated transformational driven strategy. shifts that fortunately, were already underway at With a committed workforce of over 4,500 team Sagicor. I am extremely proud of the way Team Our financially strong position helped us maintain and members and advisors in the Caribbean, Sagicor Sagicor responded to the changing environment.