FINSAC restructuring instantly spurs LoJ profits

Reynolds

LIFE OF Jamaica (LoJ) has recorded consolidated after-tax profit of $202.9 million for the year to December 2000, stimulated by a capital restructuring agreement with the Financial Sector Adjustment Company (FINSAC), and represented what the insurance firm said was a truly significant turnaround in the company's operations.

Along with last year's encouraging performance, LoJ has also seen its 2001 first quarter profits of $92.7 million almost equalling its loss of $93.4 million in the quarter to March 2000, president and chief executive officer of the island's largest insurance firm, Milverton Reynolds, announced on Monday.

He also announced that its 2000 audited results were filed with the Jamaica Stock Exchange (JSE) last Friday, paving the way for trading in LoJ's shares to resume Monday morning.

Addressing a press conference at the company's corporate headquarters at Barbados Avenue, New Kingston, Mr. Reynolds expressed confidence that LoJ would continue to improve, against the background of a stable and growing economy, a restructured and stable insurance sector with consumer confidence returning, and an operationally sound and well-capitalised insurance company, which he said "will undoubtedly dominate the market and remain leader of the industry."

According to Mr. Reynolds, LoJ's after tax profit of $202.9 million compared favourably with a consolidated loss of $2.8 billion in 1999. Consolidated profit from operations for the quarter to March 31, 2001 totalled $125.5 million, compared with an operating loss of $59.7 million for the same period in 2000.

The 2000 results, he said, "reflect the fact that Life of Jamaica's local operations received a $2 billion capital injection from FINSAC as consideration for the purchase of 76 per cent of the ordinary shareholding of the company."

Mr. Reynolds said that despite the challenges faced in 2000, LoJ made "great strides" towards streamlining its operations to improve efficiency. "We have always maintained that LoJ is operationally sound ... and that when the needed capital was injected the company would not only be profitable, but would vigorously continue its march towards reaching its true potential," said the president, noting that "the results for 2000 are a testimony to that fact."

He said the results for the first quarter have been "very good" and "we have seen continued strong and positive performance in all our major lines of business."

Mr. Reynolds said that on completion of the acquisition of FINSAC's 76 per cent stake in LoJ, and with it additional capital injection of $1 billion, the insurance firm would have a further strengthened capital base "making prospects for the company excellent for the rest of the year."

In May, FINSAC accepted a bid of $2.047 billion from a consortium led by Barbados Mutual Life Assurance Society for the purchase of its 76 per cent stake in LoJ. Barbados Mutual subsequently decided to carry out a due diligence of LoJ, which is expected to be completed during the course of this month.

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