Grupo Sura 1Q 2018 Profits Drop 23.5% Year-on-Year
Medellin-based insurance, pensions and finance giant Grupo Sura announced May 15 that its first quarter (1Q) 2018 consolidated profit fell 23.5% year-on-year, to COP$310 billion (US$108.5 million).
Consolidated revenues for the company also dropped 2.2% year-on-year, to COP$4.76 trillion (US$1.66 billion).
Despite the corporate-wide dip in revenues and profits, “positive performance of Suramericana’s and Sura Asset Management’s operations partly offset the impact of market volatility on the yields of the investments,” according to the company.
“This external effect was reflected in lower yields for the company’s own investment portfolios that back up the insurance and pensions business, and was also a sharp contrast to this indicator’s positive performance a year ago.”
Those investment yields fell by 47% year-on-year, to COP$253 billion (US$88.7 million), according to the company.
“In addition, Suramericana’s decision not to participate in the pension D&S [disability and survivorship] insurance business in Colombia to focus on other solutions more aligned with its strategies also led to lower consolidated revenue,” according to Sura.
Nevertheless, Suramericana enjoyed consolidated revenue growth of 3.6 % year-on-year, hitting COP$3.36 trillion (US$1.17 billion). Suramericana also saw 2.8 % growth in retained premiums, “due significantly to the performance in Chile and Mexico, and the positive dynamics of the health operations in Colombia,” according to Sura.
“This growth came together with a lower claims rate and higher efficiencies, which translated into underwriting profits that improved 31% [year-on-year] compared to the first quarter of 2017.”
Meanwhile, the Sura Asset Management division – which administers pensions, savings, and investments – saw a 6% increase in revenue from commissions in the mandatory-pension business and an even-better 9.7% revenue boost in the voluntary-pension business.
In that division, 82% of its managed pension funds had returns that were “higher than the average for the markets where they operate,” according to Sura. As a result, that division closed 1Q 2018 with COP$393 trillion (US$141 billion) in managed assets, covering 19.2 million clients.
Liabilities decreased by 2.8%, to COP$41.58 trillion (US$14.95 billion), thanks to a reduction of COP$201.9 billion (US$69 million) in financial liabilities. “The behavior of assets and liabilities was reflected in a 4.2% reduction in equity, to COP$25 trillion (US$9 billion),” according to the company.
