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Introduction & Market Context
Sagicor Financial Company Ltd. (TSX:SFC) presented its Q1 2025 investor slides on May 14, highlighting the company’s significant growth trajectory and what management describes as an attractive valuation opportunity. The insurance and financial services provider, which operates across North America and the Caribbean, emphasized its substantial progress since its Toronto Stock Exchange listing in 2019, pointing to a notable disconnect between its financial performance and current market valuation.
Trading at C$8.56 as of June 11, 2025, Sagicor shares have gained 65% since the completion of the ivari acquisition, with total shareholder return reaching 75% during the same period. Despite this appreciation, the company’s presentation emphasized that shares continue to trade at a 20% discount to book value.
Executive Summary
Sagicor’s presentation portrayed a company with strong momentum across its diverse geographic segments. With total assets of $23.2 billion as of Q1 2025, the company has more than doubled in size since its TSX listing. Core earnings to shareholders for the last twelve months reached $198 million, with the company reporting that Q1 2025 specifically delivered $30 million in core earnings, representing a 100% year-over-year increase.
The company’s business spans multiple regions with operations in Canada (ivari), the United States, Jamaica, and the Southern Caribbean. The presentation highlighted that approximately 75% of Sagicor’s balance sheet is now in Canada and the United States, with over 80% of revenues derived from life, health, and annuity insurance.
As shown in the following chart breaking down the company’s business segments:
Quarterly Performance Highlights
Sagicor’s Q1 2025 results demonstrated continued momentum across its key segments. The company reported $648 million in revenue for the quarter, a modest 1.4% increase year-over-year. However, core earnings to shareholders doubled compared to Q1 2024, reaching $30 million for the quarter.
The company emphasized its strong capital position with a Group LICAT ratio of 137%, providing flexibility for continued growth and capital returns to shareholders. During the quarter, Sagicor increased its quarterly dividend by 12.5% to US$6.75¢ per share, representing a 4.8% forward dividend yield at current share prices.
The presentation highlighted Sagicor’s valuation metrics, suggesting significant upside potential based on both book value and deployable capital to shareholders:
Detailed Financial Analysis
Sagicor’s financial trajectory since its TSX listing in 2019 has been impressive, with assets growing by over 160%, deployable capital increasing by more than 110%, and comparable earnings expanding by over 190%. The company has maintained this growth while simultaneously returning capital to shareholders, with $182 million in dividends declared and $62 million in share repurchases since listing.
The company’s profitability metrics show consistent improvement across segments, with particularly strong performance in its Canadian and U.S. operations. Sagicor Canada (ivari), acquired in 2023, represents the largest segment by both assets and net income, while Sagicor Life USA has demonstrated excellent growth in the fixed annuities market.
The following chart illustrates Sagicor’s track record of growth and profitability:
Sagicor has maintained a disciplined approach to capital allocation, balancing growth investments with shareholder returns. The company’s dividend payout ratio stands at 31% of core earnings to shareholders as of Q1 2025, reflecting a sustainable level that allows for continued investment in growth initiatives.
The company’s commitment to returning capital to shareholders is demonstrated in this chart:
Strategic Initiatives
Sagicor outlined several strategic growth initiatives in its presentation, focusing on expanding high-margin businesses and improving returns on equity. Key elements of the strategy include:
1. Continuing to grow the U.S. annuities platform organically, with a target of over $1 billion in annuity sales for 2025
2. Achieving synergies through the integration of Canadian and U.S. operations
3. Improving ROE in legacy Caribbean businesses through technology and digital transformation
4. Refinancing debt at investment grade levels
The company’s growth trajectory and geographic diversification strategy are illustrated in the following slide:
Sagicor’s investment portfolio remains conservatively positioned, with 72% allocated to debt securities, primarily investment-grade corporate and government bonds. This approach provides stability while supporting the company’s insurance liabilities.
Forward-Looking Statements
Looking ahead, Sagicor provided specific guidance for 2025 and 2026. The company expects core basic earnings per share of 74.0 to 80.0¢ for 2025, followed by at least 10% growth in 2026. Management also set a target of $180-200 million in new business contractual service margin (CSM) for 2025.
The company highlighted its attractive valuation relative to Canadian life insurance peers, noting that it trades at significant discounts on price-to-book and price-to-earnings metrics. According to the presentation, Canadian life insurance peers trade at a 140% premium to Sagicor based on these metrics.
The comparison to peers and analyst perspectives are summarized in this slide:
During the Q1 earnings call, CEO Andre Musso emphasized the company’s record quarterly core earnings since its conversion to IFRS 17 in 2023, stating, "Our quarterly core earnings to shareholders were our highest on record." He also highlighted the importance of strategic initiatives, noting, "We continue to advance our strategic initiatives including fostering greater collaboration across operating segments."
Sagicor’s sustained balance sheet growth has been a key driver of its improving profitability, as illustrated in this comprehensive chart showing the company’s trajectory since 2019:
While Sagicor’s presentation painted an optimistic picture, the company also acknowledged potential challenges, including global economic uncertainties, competition in the annuity market, regulatory changes, currency fluctuations, and dependence on the U.S. market for growth. Nevertheless, management expressed confidence in the company’s ability to navigate these challenges while continuing to deliver value to shareholders.
Full presentation:
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