Sagicor Financial (TSE:SFC) reported what executives called an “exceptional” 2025, with record core earnings and a year-end dividend increase, while also outlining a multi-year plan to expand return on equity through growth in its U.S. annuities business, margin opportunities in Canada, and a large-scale digital transformation tied to a planned reorganization of its Caribbean operations.
Record core earnings in 2025, but net income affected by market and FX volatility
President and CEO Andre Mousseau said full-year 2025 core earnings to shareholders reached a record $142 million, up 57% from the prior year and above management’s revised guidance of $120 million to $130 million. Core return on shareholders’ equity (ROE) for the year was 14.2%, which management said was helped by about $15 million of “positive emergence” from short-term and long-term insurance portfolios.
Chief Financial Officer Kathryn Jenkins said fourth-quarter 2025 core earnings to shareholders were $32 million, up 13% year over year. However, the company posted a net loss to shareholders of $14 million in the quarter, which Jenkins attributed to volatility from market movements and foreign exchange. For the full year, net income to shareholders was $67 million, and total comprehensive income to shareholders was $110 million.
Jenkins said the company grew shareholders’ equity by $77 million while returning more than $40 million to shareholders through dividends and share buybacks. Full-year revenue was $3.0 billion, compared with $3.1 billion the prior year. New business contractual service margin (CSM) was $167 million, within revised guidance of $155 million to $175 million (net of reinsurance).
Segment results: Canada and U.S. saw interest-rate-driven market impacts; Caribbean benefited
In Canada, Jenkins said annualized new premium was $17 million in the quarter and $69 million for the year, generating new business CSM of $12 million in Q4 and $44 million for 2025. Core earnings to shareholders were $27 million for the quarter and $103 million for the year, up 12% and 19%, respectively, driven by improved net investment results and insurance experience compared with unfavorable insurance experience in Q4 2024. Net income was lower than core earnings due to market-related impacts from lower asset prices tied to higher Canadian interest rates. Net CSM ended the year at $566 million, up 1% sequentially.
For Sagicor Life USA, Jenkins said new business production was $268 million in the quarter and $1.3 billion for 2025, the company’s highest-ever annual production, contributing to assets under management growth of more than $900 million year over year. Core earnings to shareholders were $8 million in Q4, slightly lower year over year due to increased operating expenses to support growth. Full-year core earnings rose 2% to $41 million. The segment recorded a $12 million net loss in Q4, with Jenkins citing $18 million of market experience losses from interest-rate movements that affected liabilities more than assets. Full-year net income was $8 million, and net CSM was $151 million, flat quarter over quarter.
In Jamaica, Jenkins reported strong new business sales in long-term and short-term insurance, while the commercial banking segment expanded profitably in loans and credit cards with higher net interest margin and fee revenue. Sagicor’s share of Jamaica core earnings to shareholders was $12 million in Q4 and $48 million for the year, both up year over year, driven by better margins on short-term business, favorable insurance experience, and improved banking profitability. Sagicor’s share of Jamaica net income to shareholders was $51 million for 2025. Net CSM was $293 million, flat sequentially.
In the broader Caribbean segment (Sagicor Life), Jenkins said core earnings to shareholders were $7 million in Q4 and $42 million for the year, up 17% and 59%, respectively, due to improved short-term business profitability from price adjustments and favorable insurance experience. Net income exceeded core earnings in the quarter and the year due to positive market experience, which management said reflected the opposite interest-rate sensitivity versus North American businesses because the Caribbean segment has a modestly net short asset position by duration. Net CSM was $262 million, up 3% sequentially.
Capital position, book value, and dividend increase
Jenkins said Sagicor remained well capitalized, with a Group LICAT ratio of 136% and a financial leverage ratio of 26.9% at quarter end. Book value per share rose to $7.65 in U.S. dollars (CAD 10.49). Deployable capital—defined as shareholders’ equity plus net CSM to shareholders—was $2.2 billion, or $15.95 per share (CAD 21.87).
The company also announced a dividend increase to $0.075 per share, or $0.30 annualized, representing an approximately 11% increase over the prior year. Jenkins said even with the higher payout, management expects to remain toward the bottom of its 30% to 40% core earnings payout target range, reflecting a focus on reinvesting earnings to drive future growth.
Strategic focus: U.S. annuities scale, Canadian margin opportunity, and Caribbean merger and transformation
Mousseau said management sees “three robust avenues” for ROE expansion over the next three to five years:
- U.S. annuities growth: He said the company surpassed its goal of more than $1 billion of new annuities in 2025 while maintaining “spread discipline” and asset quality in a competitive environment. Assets in the segment grew to nearly $7 billion, and management sees a path over a three-year planning cycle to reach “near $10 billion,” where it expects meaningful margin expansion. Mousseau said investments in systems and executive hires in 2025 should support earnings growth more than proportional to asset growth.
- Canadian margin expansion: While describing the Canadian business as more mature, Mousseau said margins have outperformed expectations since 2023 and suggested additional asset margin opportunity by applying lessons from the U.S. balance sheet to Canada’s “very conservative posture,” which he said includes significant low-yielding provincial and other fixed-income assets.
- Caribbean combination and digital transformation: He highlighted a definitive agreement to merge two Caribbean subsidiaries into a single publicly listed entity, Sagicor Group Caribbean. Mousseau said the transaction could close around the fourth quarter of 2026 and would enable a “full digital-enabled transformation” at scale, aided by advances in AI that could accelerate data transformation work.
Mousseau said each initiative, if fully realized, could contribute roughly 1% to 2% of ROE growth over the next three to five years, with potentially more headroom in the Caribbean than in Canada.
Outlook: investment year ahead, then ROE guidance for 2027 and 2028
Management declined to issue a specific ROE or core earnings target for 2026, with Mousseau calling it an “investment year” due to expected closing and transformation-related costs tied to the Caribbean transaction, as well as ongoing investments in people and systems to support growth. He also said the merger will change the geographic mix of earnings, including shifts in ownership stakes, and noted that pro forma internal financing costs are expected to improve by about $20 million as intercompany debt is restructured and retired.
For the longer term, Mousseau provided guidance for core ROE (excluding any assumed positive or negative insurance emergence) of approximately 14% in 2027 and approximately 15% in 2028. In the Q&A, he clarified that the 14% figure is intended as a full-year number for 2027 and suggested the trajectory should be accelerating by the end of 2026.
On expenses, Mousseau said year-over-year increases in Canada and the U.S. reflected investments in people and systems to support growth, along with a Q4 step change tied to tax planning through more structured allocation of expenses into operating segments. Jenkins added that the company’s annual expense studies in Q4 led to updates to actuarial assumptions, where higher maintenance expenses reduced CSM when applicable.
Jenkins also addressed Hurricane Beryl impacts, saying the event was “barely material” and that most effects were included in results. She said the impact was about $2.1 million net in core (claims net of reinsurance), with roughly $3 million in non-core items related to infrastructure impacts, and noted the company is well reinsured.
About Sagicor Financial (TSE:SFC)
Sagicor Financial Company Ltd. is a leading financial services provider with over 180 years of history in the Caribbean, over 90 years of history in Canada, and a growing presence in the United States with over 70 years of history. Sagicor offers a wide range of products and services, including life, health, and general insurance, banking, pensions, annuities, investment management, and real estate. Sagicor operates through the following four segments: Sagicor Canada, Sagicor Life USA, Sagicor Jamaica, and Sagicor Life.
