Grupo Sura Full-Year 2021 Net Income Soars 353% Year-on-Year
Medellin-based multinational insurance, pensions, health care and financial services giant Grupo Sura announced February 25 that its full-year 2021 net income jumped 353% year-on-year, to COP$1.5 trillion (US$282 million).
Operating earnings rose 16.5% year-on-year, to COP$24.8 trillion (US$6.64 billion) — COP$4 trillion (US$1.02 billion) more than in 2020 — “due to the performance dynamics of its subsidiaries and a record high in revenues obtained via the equity method,” including its major shareholdings in Medellin-based financial/industrial giants Grupo Nutresa, Grupo Argos and Bancolombia.
Fourth-quarter (4Q) 2021 net income came-in at COP$406.7 billion (US$103 million), a reversal from the COP$61 billion (US$15.5 million) net loss in 4Q 2020.
Beyond the encouraging results in 2021, “Grupo Sura expects its full-year 2022 net income to increase between 10% and 15%” over 2021, according to the company.
Sura credited the rise in 2021 income to increases in written premiums by its Suramericana insurance division; fee and commission income obtained by pensions/financial services division Sura Asset Management, as well as “good performance of the equity method in associated companies, which had record results, freeing-up of provisions with Bancolombia due to a lower risk exposure in its loan portfolio,” according to Sura.
“The results obtained at year-end 2021 exceeded our growth expectations for all of the Sura lines of business, thereby bringing us closer to our pre-pandemic figures,” added Sura CEO Gonzalo Pérez.
Operating expense also rose 15.7% year-on-year, “mainly due to a higher claims rate at Suramericana as a result of the pandemic, which was partially mitigated by a greater control over administrative expense as well as greater efficiencies obtained by the different companies,” according to the company.
“Consequently, consolidated operating earnings rose by 59.2% to COP$2.6 trillion (US$685 million) and consolidated net income came to COP$1.5 trillion (US$407 million), 4.5-times higher than for 2020 and corresponding to 89% of that obtained in 2019,” the company added.
Consolidated shareholders’ equity likewise rose by 9.5% year-on-year, to COP$31.3 trillion (US$7.85 billion), according to the company.
During 2021, the Sura Asset Management division (retirement savings, investments and asset management) grew to 21.6 million clients in six countries in Latin America, and its assets-under-management increased by 7.4%, to COP$566 trillion (US$142 billion), generating COP$3 trillion (US$810 million) in operating income, up 10.6% year-on-year, according to the company.
“This was mainly driven by its fee and commission income, which increased by 11.8% in the retirement savings business and 25.4% in the ‘voluntary savings’ segment, through Inversiones Sura (voluntary savings for private individuals) and Sura Investment Management (the regional platform for the institutional segment),” according to the company.
As a result, Sura Asset Management’s 2021 consolidated net income rose 45.3% year-on-year, to COP$ 627 billion (US$167 million), while its net debt level fell by COP$668 billion (US$155.9 million), according to the company.
As for the Suramericana insurance and risk-management division, this group posted a 16.5% hike in written premiums at year-end 2021, reaching COP$21.8 trillion (US$5.8 billion), “driven by the good levels of performance for all three of its insurance segments, namely Life (13.2%), Health Care (30.7%) and Property and Casualty (10.9%). This, together with a rigorous control over administrative expenses, partially mitigated the increase in claims due to the reopening of the economies and the pandemic,” according to the company.
In 2021, Suramericana allocated COP$1.6 trillion (US$408 million) to Covid-related claims, but “thanks to the progress made with mass vaccination programs, the claims rate has so far shown an improvement in the Life and Health Care segments,” according to the company.
Because of the heavy costs of Covid-19 claims last year, Suramericana net income fell to COP$66.35 billion (US$18 million), or 68.6% lower than for 2020.
“Finally, Suramericana ended the year with technical reserves worth COP$23.3 trillion (US$5.8 billion), having increased by 10.6%,” according to the company.