US based Barbadian Actuary Walter Blackman shares his views on the decision by Sagicor to redomiciled from Barbados. Sagicor, formerly The Mutual Society, always evokes emotion in Barbados given its coloured past. There is the intervention by Minister of Housing Dennis Kellman which provoked a caustic response by Sagicor Group Head Dowridge Miller. The decision by the Sagicor board for strategic reasons to sever its tie to Barbados as its domicile questions our capacity as a sovereign country to sustain successful indigenous companies. How will Barbados challenge the hegemony of Trinidad and Jamaica as they cherrypick our best companies? Should it mater? How will our national pride suffer because of it.
Walter Blackman’s comment:
The difference between Sagicor and CLICO is as wide as the difference between night and day. You would have observed that Sagicor’s recent growth was achieved through the acquisition of companies, rather than through organic growth. From where I sit, it appears to me that Dodridge Miller’s focus was on the growth-through-acquisition process. Whilst he was “out” pursuing that objective, someone had to stay at home and manage the company’s operations. That responsibility seems to have fallen on the shoulders of Mrs. Pat Downes-Grant.
Pursuing a strategy of growth through acquisition can have a serious effect on a company’s income statement, balance sheet, and internal operations. Companies don’t naturally merge seamlessly so tremendous effort has to be made to rationalize computer systems, reallocate corporate talent, streamline operations, manage risks, and eradicate duplication and wastage. I believe Sagicor is still wrestling with some of these challenges today. Sagico Life USA has presented its fair share of problems. At one point, the outlook for the company was negative, but it was recently upgraded to stable after the statutory operating results of the company showed improvement. Acquiring Sagico Life Jamaica (SLJ) represented a bold but worrisome investment in the Jamaican economy. However, Sagicor has reaped sustained favourable results from its SLJ operations, and the overall financial situation in Jamaica seems to be improving. I believe the company has divested itself of its UK business.
Despite its challenges, Sagicor has a lot going for it as a company. It is adequately capitalized, has strong brand recognition, enjoys a strong competitive market position within the Caribbean, and seems destined to receive a stream of consistent earnings from diverse sources for years to come.
Not surprisingly, the last A.M. Best rating I saw gave Sagicor a Financial Strength Rating (FSR) of A- (Excellent), and an Issuer Credit Rating (ISR) of a-.
Sagicor’s history cannot escape the tale of colour and class that defines the history of Barbados. From the moment black persons assumed some positions of power and authority within Sagicor, predictions of the company’s imminent collapse became audible and frequent. The mere fact that Sagicor is still standing today, with an excellent Financial Strength Rating from A.M. Best, is enough for us to offer this Caribbean company some words of congratulations and encouragement.
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