Great. Thank you, operator, and good morning, everyone.

Thank you for joining us today to discuss Sagicor's second quarter 2026 results. Before we begin, I'd like to remind everyone that our disclosures are available on our investor relations website at investors.sagicor.com, which include a press release, financial statements, MD&A, and the supplemental information package, which contains core earnings, drivers of earnings, and additional disclosures.

The link to our live webcast is also available on our website. This conference call is open to the financial community, investors, the media, and the public, with the Q&A period being reserved for financial research analysts.

I would like to refer you to the cautionary language and disclaimers in our materials and public filings regarding the use of forward-looking statements and the use of non-IFRS financial measures and ratios, which may be mentioned as part of our remarks today. I would also like to remind the audience that actual results regarding forward-looking information could differ materially, and please note that a detailed discussion of Sagicor's risk factors is provided in our MD&A, which is available on SEDAR+ and on our website.

A discussion of the assumptions underlying our expectations is provided in our filings and earnings releases. Unless otherwise noted, all dollar amounts referenced will be in US dollars, consistent with our reporting practice.

Joining me today is our President and CEO, André Mousseau, our Chief Financial Officer, Kathy Jenkins, and Anthony Chandler, our Chief Controller. We'll begin with prepared remarks by André and Kathy, followed by a Q&A session.

With that, I'll pass the call to our President and CEO, André Mousseau.

Thank you, George. Good morning, everybody.

Thank you for joining us. We are pleased to report another solid quarter for Q2 2026.

Our core earnings returned to our target levels as insurance experience was broadly in line with our expectations, and our net income was significantly higher than our core earnings as market volatility on asset prices worked in our favor this quarter. We continue to make excellent progress on our strategic initiatives to drive ROE expansion and future growth, which I'll come back to after Kathy goes through a more detailed financial review of Q2.

Kathy?

Thank you, André, and good morning, everyone. Sagicor's Q2 2026 core earnings to shareholders were $34 million compared to $25 million in Q1 2026.

The stronger core earnings in Q2 were primarily driven by improvements in core insurance experience and investment portfolio performance. Net income to shareholders was $87 million, benefiting from favorable interest rate movements in Sagicor Canada and Sagicor Life and strong equity markets impacting our universal life business in Sagicor Canada.

During the quarter, our operating segments generated steady new business production leading to strong new business CSM of $44 million. Annualized core ROE for Q2 was in line with management's expectations at 13.6%.

Now I will give you some more details on the segment financials. Sagicor Canada's new business production of $17 million for the quarter was consistent with management expectations, resulting in new business CSM of $11 million.

Core earnings to shareholders of $27 million for the quarter increased 8% year-over-year by higher expected investment earnings. Net income to shareholders of $70 million for the quarter was higher than core earnings to shareholders due to favorable market-related impacts from lower interest rates and strong equity returns.

Net CSM in US dollars decreased 2% quarter-over-quarter to $548 million due to the devaluation of the Canadian dollar, whereas net CSM increased marginally on a constant currency basis. Sagicor Life USA's new business production of $284 million for Q2 was in line with management expectations.

Core earnings to shareholders of $6 million for the quarter decreased year-over-year and were impacted by core insurance experience losses in the legacy life block, compared to core insurance gains in Q2 2025. Net income to shareholders was also $6 million for the quarter as market experience and other non-core net income were approximately neutral.

Net CSM increased 1% quarter-over-quarter to $159 million. Sagicor Jamaica maintained strong insurance sales in the quarter supported by significant policy renewals and new business, resulting in net premium growth of 13% year-over-year.

Sagicor's share of Sagicor Jamaica's core earnings to shareholders of $10 million for the quarter was driven by higher expected investment earnings from higher interest margins and growth in the commercial banking and investment portfolios. Sagicor's share of Sagicor Jamaica's net income to shareholders was $9 million for the quarter, marginally lower than core earnings to shareholders.

Net CSM increased 3% quarter-over-quarter to $308 million driven by strong new business production, contributing $14 million of new business CSM. Sagicor Life generated $116 million of net premium during the quarter, having maintained strong insurance sales supported by growth in single premium annuities.

Core earnings to shareholders were strong at $14 million for the quarter with favorable core insurance experience in both the short-term and long-term businesses. Net income to shareholders of $25 million for the quarter was higher than core earnings to shareholders driven primarily by favorable interest-rate-related market movements.

Net CSM was $248 million, a decrease of 7% quarter-over-quarter with organic growth offset by the impact of reinsurance contract modifications. At our head office, other operating companies and adjustments segment, core costs to shareholders were $22 million for Q2, consistent with the prior quarter, and total reported costs to the shareholders were $23 million for Q2.

With these results, Sagicor remained well capitalized in Q2. The group LICAT ratio was 134%, and our financial leverage ratio was 27.4%.

Our book value per share increased to $7.65 in US dollars or $10.87 Canadian. We took advantage of some softness in our trading price later in Q2 to repurchase half a million shares for just under $3 million US.

We are also pleased to announce our 27th consecutive quarterly dividend to shareholders since we've been listed on the Toronto exchange, and third dividend at the higher level of US 7.5 cents per quarter or 30 cents annualized. On that note, I will hand back to André to close our prepared remarks.

Thank you, Kathy. We're pleased to have seen some of the results revert after a slow first quarter, both in terms of insurance experience in aggregate as well as seeing market volatility being favorable, which as much as anything on the interest rate front came from just a particular moment in time at the end of March in terms of mark-to-markets.

Looking beyond our backwards-looking results, we continue to make excellent progress on our strategic initiatives. Our growth strategy in the US received another strong validation in our recent financial strength credit rating upgrade from AM Best to A in that market.

Local credit ratings are very important in the US market, and we believe that that upgrade will help open up further distribution opportunities for us as we look to accelerate the growth of that business next year and beyond under its new leadership. Our Canadian business continues to generate excellent financial returns as we optimize our balance sheet there.

Our Caribbean transformation plan enabled by the pending combination of our segments Sagicor Life and Sagicor Jamaica, that transformation plan is well underway and tracking to add significant value in years to come. As we make progress towards combining those organizations, we do expect we'll start to see more one-time charges and investments in the third and fourth quarters of this year ahead of closing that transaction.

We believe that the investments that we're making this year in that really significant transformation will enable us to drive significant earnings growth in the Caribbean in the years to come. As we've observed in the first couple of quarters of this year and even in the first half of this third quarter, we should expect to see continued quarterly volatility around the balance sheet.

That just seems to be the world we're in right now, but over the long term, we're very excited about the direction of our core ROE and ultimately book value creation and total value creation for our shareholders. With that, George, I think we're ready to open the line for questions.

That's right, operator. Please open the line for questions.

Hey, good morning. I have a few questions here.

One on the insurance experience. There was some improvements overall sequentially after what we saw in Q1, but the US had a few quarters now of negative mortality, I believe.

Can you just give a high-level overview of what you're observing in that block? Is it legacy life, annuities, or what?

Thanks, Gabe. If you look at this quarter versus last quarter, kind of the Q1 was a little bit of, if you flip four coins in a row, one in 16 times, they're always going to come up tails.

You can kind of compare that to Q2 of last year where they all came up heads or in the positive. In aggregate, we were about flat, but you're right, we had negative in the US segment again.

The significant majority of that experience in that US segment is around the legacy life block of business that we don't write anymore, and it's kind of a combination of vintage 2016 through 2020 term business as well as some significantly older blocks. You really have to get in and parse it on a block-by-block basis, and we're taking a really deep dive into that.

As we've talked about on our other calls, we're always looking at our actuarial assumptions. We're taking a very hard look at mortality across the board, including for our US business for Q3, and it may be that we end up strengthening reserves on that block so that we don't have to be distracted and talking about it every quarter.

In aggregate, the annuities business, the business we put on the book in the last 5 years or so as we've shifted to this strategy is in aggregate more or less in line with the economics and the expectations that we had. You really have to get in and look at it on a business line by business line basis.

A reserve adjustment would be CSM reduction perhaps, or would that be how it would become through?

It's either through CSM or through equity.

The way

it works is you have to get in on a cohort-by-cohort basis. If we knew what the answer was, we'd have put it out in Q2.

We're

doing the work for the deep dive for Q3. We're taking a look at that.

We're taking a look at the balance sheet in aggregate. We're taking a hard look at the Canadian business.

With the combination of the Caribbean businesses, we're going to get a chance, whether it's in Q4 of this year or Q1 of next year, to completely reset that as a new combined balance sheet, and we're going to take a look at those as well.

Conversely, the annuities persistency seems to have been quieter of late. It looks like last year and I believe the year prior, there was some noise around lapses, but that seems to have been settled out.

Is that a fair statement?

Yeah. If you look at what we did last year, we said, okay, here's what's happening as the early stages of the cohorts come up for renewal, and you would start to see patterns of behavior with a little bit of negative correlation between how they roll over and the size of the policy.

We went in and tweaked those assumptions. Now what we're seeing on that is emergence that is more in line on what we had there.

We're tactically, I think, doing a good job of managing that business where obviously you want to encourage rollovers, but there are certain times where at some point, it becomes diminishing marginal returns where you're actually better off with a new policy because of the way US statutory works and as the interest rate environment has moved.

Yeah. Then the annuities sales volume, is there any connection there that were 15% or so below last year's first-half production, or is it just the rate volatility or market conditions that are causing you to step back a little bit relative to last year?

It's a little bit of all of the above. We're taking a disciplined, long-term approach around, okay, what are the IRRs?

What's the ultimate ROE of the marginal dollar that we're building to? The environment has gotten more and more competitive, and for the time being, we've stuck and we said we're going to put it right in the right place where we're offering good value to policyholders and we're happy with the returns that we're getting rather than stretching with rate and accepting lower returns as we build the balance sheet there.

What we're focused on is getting the pricing on what we're doing now right and then expanding our product and distribution and setting higher targets for next year. You see the run rate, we should still be well through that billion-dollar production this year if you look at where we've been for the first 6 months.

We have a comprehensive plan that has come with upgrading the balance sheet there. You saw that with the announcement with AM Best a few weeks ago and running with the new leadership of that organization to drive that growth next year and beyond, because we still see a really significant opportunity to deploy our capital well there.

Okay. Then last one for me, just the CSM reconciliation, there was a pretty big decline there tied to some reinsurance contract modification.

Can you shed some light on that, please?

I put this under the category of kind of balance sheet clean up of the Caribbean businesses as we move them towards the combination. These get down into individual matters with individual reinsurers, and we're kind of making decisions that are the right long-term decisions for the ROE looking forward.

Great. Thank you.

Hi, thank you. Good morning.

We could be looking at potentially some let's call it noise in the next couple of quarters with respect to investments in the Caribbean, maybe some reserve changes, and so on. Maybe you can talk a little bit or maybe it's too early to talk about expectations going into 2027.

My question then is we have witnessed a lot of volatility in investment results, and it's not just Sagicor, we've seen it across the board, but it does tend to be a bit more volatile for you. My question is, André, have you considered at some point maybe altering the investment strategy a little bit, maybe some curbs or some hedges in place to reduce the volatility?

Is that something that's crossed your mind at all with respect to how you operate, especially considering the inordinate impact it's had on your company versus some of the others that I cover? I'm not saying I've heard this from other insurers, but I'm curious if this is a thought and is not necessarily just to remove the volatility, maybe it's just even to remove some of the tails.

I'm very curious on your thought process with respect to your investment program.

Right. Thank you, Darko, and it's a really important question.

It's a great question, and the answer, has it occurred to us, is a resounding yes. This is something that we discuss as an executive team, and it comes up at the board level.

In particularly where at the board level, we have representatives from our big shareholders who take this volatility themselves. I think your observation is correct with respect to IFRS 17, or at least I'd agree with it, that with IFRS 17, there's volatility for all life insurers.

As we have benchmarked ourselves against the bigger public peers here, our volatility is more pronounced. Now that is volatility based on our analysis in the statistical use of the word and not a euphemism for bad results, because if you look at the aggregate of these whatever we're up to now, 14 quarters, I guess, under IFRS 17, our actual return versus reported core is at least as good if not, and in some cases, better than the returns on that ratio to other public life insurance companies.

We have a couple hypotheses on why it's the case that we are more volatile, and it's probably a combination of things, but we are more heavily tuned proportionally to old-fashioned balance sheet life insurance businesses than the big four Canadians who have, as and you spend lots of time with them, have evolved to have more of their business in capital-light EBITDA-type businesses. That's what's enabling them to push up ROEs into the 20% range.

Some combination of that and just simply kind of the economies of scale, the relative size of head office relative to the operating entities. It's not definitive and we can observe it that we can say, okay, our reported net income tracks over a long period of time to your core in a pretty satisfactory way, but we're seeing a lot of volatility.

The question becomes what could you do to mitigate that? You talk about tails, and potentially tactically you could talk about tails, but fundamentally, what you can do is shorten up on your assets backing capital, and make your assets backing capital that are not going to move more or less in line with your liabilities if you're getting ALM right, shorten it up, get less volatility on that, and become more indifferent or less correlated on a quarterly basis.

What that basically means is taking away risk and taking away the tenor premium on your capital, and ultimately reducing your net income over a long period of time, whether it's your core net income or the aggregate of the actuals that fall out. We are playing with a north star here of generating strong long-term return on equity.

We've made the strategic decision for the time being that we're going to optimize the economics for how much book value generation can we get over the next 2, 3, 4 years and beyond rather than shortening up and feeling it a little bit more comfortable. You're accepting that if you get a tougher mark like you did in the fourth or fifth week of March, your book value dips down to $10 a share, and then market normalizes and you come back up to $11.

Really what we're trying to do is say, okay, as we draw that book value generation out over a long period of time, how do we optimize value for long-term shareholders?

Okay. Thank you for the thoughtful response.

It's an interesting one, one that I have to think about as well, because we do see even amongst just the five Canadian lifecos, let's say, we definitely see a difference in positioning and in returns, right? Volatility, it's all connected.

I appreciate the response very much. Thank you.

Morning, guys. I think most of my questions have been answered, but just is there any update on when you expect the Caribbean transaction to be completed, and maybe just anything you can share on kind of the magnitude of noise that you expect over the coming quarters here and how you guys will kind of guide us to what to expect here over the coming quarters?

Yeah. Thanks, Trevor.

We're still pushing to get it closed in in Q4 if we can, but we may it may end up going going into the first half of next year. Because this is fundamentally an internal transaction, we can be nice to ourselves, to speak, and and close it on the the first day of a quarter, which, really really simplifies things from from an accounting point of view.

If we're not ready to go September 30th, it it moves it moves the transaction in into next year. With that, it's it's hard for us to say it's hard for us to give specific guidance around around the noise and and when it shows up, because if a lot of the transaction costs and investments that we're making happen in the same quarter that we close, then we can, kind of all goes into the the wash of the of the closing of the transaction, and, we're going to have all sorts of significant noise that noise to look through, whereas, we are marching full speed ahead with this transformation kind of irrespective of when it's going to close.

If it moves into next year, you might start seeing some of these charges that show up in Q3 and Q4, which are good investments, but, wouldn't want to give guidance on on how much because we don't even know yet which ones that that they'd be. I think we're kind of we're we're sticking to the to the story that we told last, the last couple calls where we've said, 2027, once the transaction closes, we see a path to the value creation, we see the path to, being in a kind of 14% ROE target next year, and then going to 15% in 2028 as as these strategic strategic initiatives really really kick in.

We're not we're not modifying that and feel comfortable with it given, even this quarter where we're we're closer to 14 than we are to 13. Really trying to keep our eye on the ball for for, the results next year.

Great. Then in terms of realizing the synergies on that transaction, do you expect to realize that maybe just kind of the timing of how you see that playing out?

I think it's going to be a process that builds over a couple of years. Some of the stuff would even start showing up as soon as this year.

It'll be tough to parse through because you're spending money on the investments to get them, but we have some quick wins already, and more will come through in '27, and then a lot of the things that are more around process reengineering and consolidating on more modern technologies realistically goes into 2028. That's all built into our pretty meaningful ROE growth guidance from '27 to '28.

Great. Thanks for taking my questions.

Thank you.

Thank you, operator, and thank you, everyone, for joining the call today. As usual, a replay of this call will be available for 1 month on our website, and a transcript will be posted as soon as available.

If you have any additional questions, please do not hesitate to reach out to any one of us. Have a great day, everyone.