Mr. Andre Mousseau reports

SAGICOR FINANCIAL COMPANY LTD. REPORTS THIRD QUARTER 2023 RESULTS

Sagicor Financial Company Ltd. has released its results for the third quarter ended Sept. 30, 2023. All figures are in United States dollars unless otherwise stated.

Q3 highlights:

• Revenues of $291.2-million;
• Insurance revenue of $181.3-million;
• Net insurance and investment result of $97.9-million;
• Net loss to shareholders of $3.5-million;
• Estimated core earnings to shareholders of $9-million;
• Total comprehensive loss to shareholders of $11-million;
• New business CSM (contractual service margin) of $25.7-million;
• Total net CSM of $698.6-million;
• Shareholders' equity and net CSM to shareholders of $1-billion;
• MCCSR (minimum continuing capital and surplus requirements) ratio of 259 per cent;
• Dividend of 5.625 cents per common share to be paid during the fourth quarter of 2023 (22.5 cents annualized dividend).

Andre Mousseau, president and chief executive officer, said:

"We are pleased to have delivered another solid quarter in Q3. Our estimated core earnings to shareholders of $9-million were slightly below our forecasts and included some adverse experience in the quarter. Our net loss to shareholders of $3.5-million included one-time costs relating to IFRS [international financial reporting standards] 17 and our ivari acquisition, non-cash accounting charges associated with rising interest rates, and the results of our annual review of our actuarial assumptions. We believe our year-to-date net income to shareholders of $47-million through nine months represents a more accurate approximation of our earning power of our prior legacy business.

"We are particularly pleased to have been able to close the acquisition of ivari in the beginning of the fourth quarter. The immediate debt ratings upgrades validated our improved asset base and stronger overall financial position. Further, the rise in interest rates in the third quarter had a positive effect on ivari's embedded profitability, which will result in a book value gain at or above the high end of our initial estimates. These higher interest rates are also making the fundamental economics of our new business more attractive than they have been in recent years. We are excited about our growth prospects going forward and we look forward to filing our business acquisition report, which will detail our pro forma financials, in December."

Overall Sagicor Group -- quarterly highlights

In Q3 2023, Sagicor continued momentum in new business production while navigating rising interest rates and some continued adverse experience. Each of the company's segments delivered strong insurance revenue and new business CSM. Sagicor's Q3 2023 net loss to shareholders of $3.5-million was primarily caused by changes in actuarial assumptions as part of Sagicor's annual review and other one-time charges and expenses. Sagicor remains well capitalized with an MCCSR ratio for its insurance businesses of 259 per cent and a debt to capital ratio of 31 per cent.

Sagicor intends to disclose a drivers of earnings analysis and adopt a non-IFRS core earnings measure in future quarters. Sagicor believes this will support users' understanding of the underlying financial performance, and the long-term performance and valuation of the business. Sagicor estimates core earnings to shareholders under the currently proposed definition for Q3 2023 to be $9-million, which excludes $12.5-million of adjustments from net loss to shareholders. The adjustments in the third quarter consist of $2.4-million of market experience gains, $10.3-million in losses from changes in actuarial methods and assumptions, $3.8-million in one-time costs from IFRS 17 implementation and the ivari acquisition, and $3-million of other loss adjustments, partially offset by $2.2-million of the tax effects of the foregoing.

ivari update and outlook

On Oct. 3, 2023, as previously announced, Sagicor completed the acquisition of ivari. Sagicor's results for the three- and nine-month periods ending Sept. 30, 2023, do not reflect contributions from ivari, other than certain transaction costs that have been expensed or capitalized in connection with the acquisition. Starting in Q4 2023, Sagicor's consolidated financial results will include ivari's results as a new operating segment.

Sagicor is commenting on its preliminary guidance and anticipated pro forma impacts of the ivari transaction as disclosed in previous press releases. All IFRS 17 financial information is unaudited, provided for informational purposes only, and is pro forma and forward-looking in nature. It is not necessarily indicative of what Sagicor's or ivari's results of operations would have been had Sagicor or ivari reported under IFRS 17 as of Jan. 1, 2022. The impact accounts for the acquisition of ivari with a close date of Oct. 3, 2023, and it is expected to have the following pro forma impacts:

• Sagicor's current Q3 2023 shareholders' equity of $443-million would increase primarily by the bargain purchase gain (negative goodwill) created by the purchase price being lower than ivari's adjusted net assets acquired. Pro forma, the company expect shareholders' equity will be at or above the high end of the company's previous guidance of $650-million to $725-million;
• Sagicor's current Q3 2023 net CSM to shareholders is $559-million and, pro forma, the company expects net CSM to shareholders will be approximately $1.1-billion to $1.3-billion;
• Sagicor's current Q3 2023 shareholders' equity and net CSM to shareholders capital is $1-billion and, pro forma, the company expects shareholders' equity and net CSM to shareholders capital will be at or above the high end of the previous guidance of approximately $1.8-billion to $2-billion;
• Sagicor's stand-alone 2024 return on shareholders' equity is expected to be approximately 14 per cent to 16 per cent, and, pro forma, the ivari acquisition is expected to be at the low range of the previous guidance of 14 per cent to 16 per cent, largely reflecting the increase in pro forma shareholders' equity rising more than the company's increase in forward earnings;
• Beyond 2024, the pro forma company will target high-single-digit net CSM to shareholders growth and double-digit net income to shareholders growth;
• ivari is expected to be accretive on a book value and earnings basis;
• The debt to capital (including total net CSM) ratio of 31 per cent as at Q3 3023 is expected to be neutral or better pro forma the acquisition.

Business segment performance

Sagicor has three main reporting operating segments: Sagicor Life (which includes the southern Caribbean), Sagicor Jamaica (of which the company owns 49.1 per cent and which is consolidated by the company) and Sagicor Life U.S.

Business segment -- quarterly highlights

Sagicor Life:

• Sagicor Life saw growth in insurance revenue that was offset by an increase in total insurance expenses. General growth in the insurance portfolio was impacted by higher claims and cost inflation in the property and casualty, and employee benefits businesses.
• Effect of the company's annual review of assumptions was a $1.3-million positive contribution to pretax net income to shareholders and a $6.2-million negative contribution to total net CSM.
• Net income to shareholders was $3.6-million, below target due to negative experience.
• Total net CSM was $245.1-million, neutral QoQ (quarter-over-quarter) largely due to new business CSM of $12-million during the quarter, offset by negative lapse and persistency experience.

Sagicor Jamaica:

• Sagicor Jamaica had solid production in the long-term life business as well as strong results in its short-term insurance businesses, largely as a result of increased premium rates. The segment continued to benefit from an improved Jamaican economy.
• Effect of the company's annual review of assumptions was no change to pretax net income to shareholders and a $30.1-million positive contribution to total net CSM.
• Sagicor's share of Sagicor Jamaica's net income to shareholders was $14.2-million.
• Total net CSM was $274.4-million, which grew QoQ due to new business CSM of $8.3-million and reflected favourable critical illness experience.

Sagicor Life U.S.:

• Sagicor Life U.S.'s new business production of $172.1-million was robust in a favourable interest rate environment for new business.
• Effect of the company's annual review of assumptions was an $11.6-million negative contribution to pretax net income to shareholders and a $30-million negative contribution to total net CSM, reflecting actions taken in reaction to rising interest rates.
• Net income to shareholders, including the effects of assumption changes, was of $5.1-million.
• Total net CSM was $178.7-million, a decrease QoQ, primarily due to the impact of actuarial assumptions and management actions, which more than offset robust new business CSM.

Head office, other and adjustments:

• Net loss to shareholders of $26.4-million.

Dividends

On Nov. 9, 2023, the board of directors of Sagicor Financial Company approved and declared a quarterly dividend of 5.625 cents per common share. This quarterly dividend will be paid on Dec. 13, 2023, to shareholders of record at the close of business on Nov. 22, 2023. This will be the 16th consecutive dividend payment Sagicor paid to its shareholders since becoming listing on the Toronto Stock Exchange.

ivari acquisition

On Oct. 3, 2023, Sagicor announced the completion of its previously announced acquisition of ivari from Wilton Re Ltd. The purchase price of approximately $271-million was financed by a new $320-million senior secured term loan facility with a syndicate of international and Canadian banks. The company expects to file a business acquisition report on SEDAR+, including pro forma financial statements, on or before Dec. 17, 2023.

Credit rating upgrades

On Oct. 5, 2023, Sagicor announced that S&P Global Ratings and Fitch Ratings had both upgraded the company.

S&P upgraded its issuer credit rating (ICR) on the company to BBB from BB plus. S&P also raised the issue-level rating on Sagicor's senior unsecured notes to BBB from BB plus. As well, the group credit profile (GCP) was revised upward to A minus from BBB. The outlook is stable.

Fitch upgraded the issuer default rating (IDR) on the company to BBB minus from BB. Fitch also upgraded the senior unsecured debt to BB plus from BB minus. The rating outlook is stable. In addition, Fitch has affirmed ivari's insurer financial strength (IFS) rating at A minus. The rating outlook is stable.

Normal course issuer bid

Sagicor repurchased 845,400 shares, which were cancelled, in Q3 2023 for a total cost of approximately $2.8-million. The number of issued and outstanding common shares as at Sept. 30, 2023, was 141,984,483.

Management's discussion and analysis and consolidated financial statements (unaudited)

This press release, which was approved by the company's board of directors and audit committee, should be read in conjunction with the company's unaudited consolidated financial statements and accompanying MD&A. The unaudited financial statements and MD&A are available on the company's website and will soon be filed on SEDAR+.

Conference call

Sagicor Financial Company will host a conference call for analysts and investors on Tuesday, Nov. 14, 2023, at 1 p.m. ET in Toronto (2 p.m. AT in Barbados, and Trinidad and Tobago, 1 p.m. ET in Jamaica). To listen to the call via live audio webcast, visit the company's website, under the investor relations tab. The conference call is also available by dialling 1-416-764-8688 or 1-888-390-0546 (North American toll-free), 080-0652-2435 (United Kingdom), 1-866-290-2216 (Barbados) or 1-800-207-8221 (Trinidad). To join the conference call without operator assistance, you may register and enter your phone number on-line to receive an automated call back. A replay will also be available until Dec. 14, 2023, by dialling 1-416-764-8677 or 1-888-390-0541 (North American toll-free) and using the passcode 225982 followed by the pound key. A transcript of the call will also be made available on the company's website.

About Sagicor Financial Company Ltd.

Sagicor Financial 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. Sagicor offers a wide range of products and services, including life, health and general insurance, banking, pensions, annuities, and real estate. Sagicor's registered office is located at Clarendon House, 2 Church St., Hamilton, HM 11, Bermuda, with its principal office located at Cecil F De Caires Building, Wildey, St. Michael, Barbados.

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