I was intrigued by the headline appearing in the Barbados Advocate of May 3, which read Sagicor Reports Successful Year.
I actually saw it first in an email sent out by my friend Sandy Newton of Sagicor, who provides people in the media with headlines relating to the financial industry mainly in the region and occasionally from around the world.
In previous emails, Sandy had also sent out the following headlines (media house in parenthesis):
• Sagicor Lloyd’s Drags Group To ‘Disappointing’ Year (Britain’s Insurance Insider)
• 2010 Not A Great Year For Sagicor (Jamaica Observer)
• International Disasters Impact Sagicor (Trinidad Express)
But I was still worried, so I checked my own BSJ website for the story I had published on April 9 on Sagicor’s 2010 fiscal year, which was headlined Sagicor Reports Dramatic Fall In Profits For 2010.
You can understand, therefore, why I felt compelled to read the Advocate’s story.
In it, Chairman Stephen McNamara is said to be commenting “while reporting a successful year for Sagicor Life Incorporated Group”.
And there you have it. Cherry-picking one of the group’s subsidiaries instead of looking at the whole picture.
I wonder why.
I couldn’t have been Mr McNamara: he is all over the corporation’s published report discussing the problems faced by the group’s Lloyds of London syndicate, which incurred heavy losses last year and at least partly into this year, promising that remedial action was being taken.
Not significant to the Advocate?
The sad fact is that the numbers for the whole group are seriously down over the previous year, and that includes the cherry-picked Sagicor Life subsidiary which the Advocate chose to feature alone in its report, as if it exists independently of the fortunes of the parent group.
Even if, and I would find it hard to imagine, Mr McNamara was somehow only addressing Sagicor Life’s performance when he is chairman of the entire group, it is incumbent on the reporting organization to take reasonable steps to put said comments in perspective.
Looking on the company’s website or even in your own newspaper for a financial report published only recently constitutes “reasonable” to me.
Even then, Sagicor Life’s profits were down by 25 per cent on prior years, so how does that translate to being a “successful year”?
Although the group’s total revenues in 2010 were almost US$1.25 billion, up US$40 million on the previous year’s revenue, Sagicor’s net profits for 2010 were just over US$16.5 million, around just a quarter of the US$66.8 million it earned in 2009.
The company said in its annual report: “The primary source of the disappointing operating result was the very poor returns from our global P&C [property and casualty] business, operated through our UK subsidiary Sagicor at Lloyds.”
The impact on the group’s performance was impossible to ignore, except by the Advocate.
The Sagicor Life Inc. subsidiary, which comprises operations in Barbados, Trinidad, OECS, Dutch Antilles and Belize, did earn net income attributable to shareholders of US$30.2 million, but that was around 25 per cent lower than the US$40.4 million it reported for 2009.
The group also has Sagicor Life Jamaica which, along with its own subsidiaries Sagicor Life Cayman and Pan Caribbean Financial Services, had a slightly better year than Sagicor Life. With net income attributable to shareholders of US$32 million, its 2010 result was in the same ballpark as the US$34.1 million it earned in 2009.
Other subsidiaries Sagicor USA, Sagicor General Insurance Inc. and Barbados Farms Ltd all made some positive, but not great, contribution to the bottom line.
I am still trying to figure out why the Advocate would pretend that Sagicor Life equalled Sagicor Group, thus allowing it to rule out the performance of the company as a whole while focusing only on the subsidiary which operates in our market space.
Was it a pathetic effort to turn a sow’s ear into a silk purse to make the company seem to have done better than it did overall?
Perhaps it was plain ignorance. Perhaps the Advocate is not aware of, or interested in, the fact that the company which is run from Barbados has companies besides Sagicor Life operating in several other markets in which it can make or lose money each year.
But in my opinion, the Advocate did a disservice to anyone reading the headline and story, because the effect of the headline Sagicor Reports Successful Year is to suggest that the group, Sagicor Corporation, as a whole had a successful year when this cannot even be said of any of its subsidiaries and has certainly not been claimed by the group itself.
And the fact that the story itself only made passing mention of the Jamaica subsidiary and none at all of the other operating companies of the group was also, in my view, a disservice – not only to the Advocate’s readers but to financial journalism as well.
Pat Hoyos is a long-standing journalist and publisher of the Broad Street Journal.