Grupo Sura Posts COP$211 Billion Profit in 1Q 2021, Big Reversal from Net Loss in 1Q 2020

Medellin-based multinational insurance, health-care and financial services giant Grupo Sura announced May 14 a COP$211 billion (US$57 million) net profit for first quarter (1Q) 2021, compared to a COP$76 billion (US$20.6 million) net loss in 1Q 2020.

The big change “was mainly the result of the devaluation of the markets in the region” last year, as the Covid-19 crisis began to hit, according to Sura.

Sura also credited improved 1Q 2021 results to “a recovery in income due to investments in Sura Asset Management, higher profits of associated companies and control of operating expenses.”

Total revenues in 1Q 2021 rose 13.7% year-on-year, to COP$5.6 trillion (US$1.5 billion), “reflecting a growth of 7.1% in written premiums and 9.3% in income by commissions. Additionally, investment income reached COP$296 billion [US$80 million], compared to the atypical losses in the first quarter of last year, generated by the fall of the capital markets globally.

“Likewise, the increase in income from the equity method stands out due to the higher profits of [Sura’s partial shareholdings in] Bancolombia and Grupo Nutresa and a recovery of Grupo Argos and Protección,” the company added.

Among the 1Q 20201 highlights:

— The Suramericana insurance subsidiary in Colombia “has vaccinated more than 400,000 EPS Sura [health insurance network] subscribers against the Coronavirus at 91 vaccination centers, with a total capacity for applying around 25,000 doses per day, depending on the availability of these vaccines,” according to the company.

As a result, the Covid-19 fatality rate among Sura subscribers and policy-holders was less-than one-third that of the total Colombia population, according to the company.

While Suramericana obtained a 7.3% growth in written premiums, totaling US$1.3 billion, “retained claims rose by 14.5%, mainly in the Life and Health Care segments,” which resulted in a net loss of US$3 million for this subsidiary — a consequence of Covid-19 claims.

— Growths in written premiums and fee and commission income, a recovery in returns from the proprietary investments made by pension fund management firms (legal reserves), as well as an increase in the revenues received via the equity method from the stakes held by Grupo Sura, collectively boosted operating income to US$1.56 billion in 1Q 2021.

“We are seeing the benefits of a well-balanced portfolio that is driving the growth of our revenues and bottom line, as well as the headway made by Suramericana and Sura Asset Management in consolidating efficient operations,” added Sura chief financial officer Ricardo Jaramillo.

“Also worth noting is the controlled rise in expenses of just 6.3%, thanks to our ongoing focus on gaining greater efficiencies together with operating expenses that dropped 0.4% in spite of the increase in claims with Suramericana’s Life and Health Care Insurance segments,” he added.

— Sura Asset Management recorded a growth of 7.5% in fee and commission income, mainly driven by its line of retirement savings (pensions), “Inversiones Sura” (savings for private individuals) and Sura Investment Management (asset management for institutional clients).

Corporate-wide assets-under-management meanwhile grew 16.6% year-on-year, to US$150 billion, the company added.