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

Thank you for joining us today to discuss Sagicor's second quarter 26 results. Before we begin, I would 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 and 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 community, investors, the media and the public. With a Q and 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 and 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, Andre Mousseau, our Chief Financial Officer, Kathryn Jenkins and Anthony Chandler, our Chief Controller. We will begin with prepared remarks by Andre and Kathryn, followed by a Q and A session.

With that, I will pass the call to our President and CEO, Andre Mousseau.

Thank you, George. Good morning, everybody, and thank you for joining us.

We are pleased to report another solid quarter for Q2 26. 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 will come back to after Kathryn goes through a more detailed financial review of Q2. Kathryn?

Thank you, Andre Mousseau, and good morning, everyone. Sagicor's Q2 26 core earnings to shareholders were $34 million compared to $25 million in Q1 26.

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 25.

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 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 modification. At our head office, other operating companies and adjustments segment, core cost to shareholders were $22 million for Q2, consistent with the prior quarter, and total reported cost 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 500 thousand shares for just under $3 million.

We are also pleased to announce our 20-seventh consecutive quarterly dividend to shareholders since we have been listed on the Toronto Exchange and third dividend at the higher level of U.S. $0.075 per quarter or $0.30 annualized.

On that note, I will hand it back to Andre to close our prepared remarks.

Thank you, Kathy. We are 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 backward-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 A.M. Best to A in that market.

Local credit ratings are very important in The US market and we believe 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.

And 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 will start to see more 1-time charges and investments in third and fourth quarters of this year ahead of closing that transaction. And we believe that the investments that we are making this year in that really significant transformation will enable us to drive significant early growth in the Caribbean in the years to come.

As we have 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 are in right now.

But over the long term, we are very excited about the direction of our core ROE and ultimately book value creation and total value creation for our shareholders.

So with that, I think we are ready to open the line for questions. Operator, please open the line for questions.

Hi. Good morning.

I have a few questions here. 1 on the experience the insurance experience.

Sorry. There was some improvements overall sequentially after what we saw in Q1.

But The U.S. is--you know, had a few quarters now of negative mortality, I believe.

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

Yeah. Thanks, Gabriel.

If you look at this quarter versus last quarter, the Q1 was a little bit of you know, if you flip 4 coins, in a row, 1 in 16 times, they are always going to come up tails. You can kind of--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 are 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 do not write anymore. And it is kind of a combination of kind of vintage 2016 through 2020 term business.

As well as some significantly older blocks. And so you really have to get in and parse it on a block-by-block basis.

And we are taking a really deep dive into that. And so as we have talked about on our other calls, we are always looking at our actuarial assumptions.

We are taking a very hard look at mortality across the board Including for our US business for Q3. And then maybe that we end up strengthening so that we strengthening reserves on that block so that--you know, so that we do not have to we do not have to be distracted and talking about it every quarter.

Got it. You know, in aggregate, you know, the annuities business, the book that we put on the, you know, the business we put on the book in the last 5 years or so as we have shifted to this strategy.

In aggregate, more or less in line with the economics and the expectations. That we had.

And so you know, you really have to get in and look at it on a business-line-by-business-line basis.

And then reserve adjustment would be CSM reduction perhaps. So would that be how it would be coming through?

Yeah. it is either it is either through CSM.

Or through equity and, you know, the way it works--the way it works is you have to get in on a cohort by cohort basis. And so, you know, if we knew what the answer was, we would have put it out in Q2.

Yep. And, you know, we are we are doing the work for the deep dive for Q3.

And, you know, we are we are taking a look at that. We are taking a look at some of the we are taking a look at the balance sheet in aggregate.

We are taking a hard look at the Canadian business and with the combination of the Caribbean businesses, you know, we are going to get a chance whether it is in Q4 of this year or Q1 of next year to completely reset that as a new combined balance sheet and we are going to take a look at those--a look at those as well.

Conversely, the annuities persistency seems to have been quieter of late, so it looks like that is we know it was last year, I believe the year prior, there was some noise around the lapses, but that seems to have been settled out. Is that a fair statement?

Yeah. So, know, if you look at what we did last year, we said, okay.

Here's what is happening as the early stages of the of the cohorts come up for renewal and, you know, you would start to see patterns of behavior with a little bit of, you know, negative correlation between how they roll over and the size of the policy. And so we went in and tweaked those assumptions.

And now what we are seeing on that is, you know, emergence that is more in line on what we have there. And, you know, we are we are tactically, I think, doing a good job of managing that business where, obviously, you want to encourage rollovers, but you know, there are certain times where at some point, it becomes diminishing marginal returns where you are actually better off with a new policy because of the way US statutory works and as the interest rate environment has moved.

Yeah.

And I and that you know, the annuities sales volumes, is there any connection there that we are, you know, about 15% or so below last year's first half production, or is it just the, you know, rate volatility or market conditions that are know, causing you to step back a little bit? Relative to last year?

You know, it is a little bit of all of the above. You know, we are we are taking a disciplined long term approach around okay, what is the you know, what are the IRRs What are--you know, what is the ultimate ROE of the marginal dollar that we are building to.

And so you know, the environment has gotten more and more competitive and, for the time being, we have stuck and we said we are going to put rate in the right place where we are offering good value to policyholders and we are happy with the returns that we are getting rather than rather than stretching with rate and accepting lower returns as we as we build the balance sheet there. And so you know, what we are focused on is getting the pricing on we are doing now right and then, you know, expanding our product and distribution and setting higher targets higher targets for next year.

You know, you see the run rate. We should you know, still be through that well through that billion dollar production This year, if you look at that where we have been for the first 6 months.

But, you know, we have a comprehensive plan that has come with you know, upgrading the balance sheet there. You saw that with the announcement with AmBest a few weeks ago.

And, you know, 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. And then last 1 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?

Yeah. You know, I put this under the category of balance sheet cleanup of the of the Caribbean businesses as we move them move them towards the combination.

And so, you know, the these are know, these get down into individual matters with individual reinsurers. And we are kinda making decisions that are the right long term decisions you know, for the ROE looking forward.

Right. Thank you.

Hi. Thank you.

Good morning. So, yeah, 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.

So maybe you can talk a little bit about what or maybe it is too early to talk about expectations going into 2027. So my question then is, we have witnessed a lot of volatility in investment results.

And, you know, it is not just Sagicor we have seen it across the board, but it does tend to be a bit more volatile for you. So my question is, Andre Mousseau, 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 is crossed your mind at all? With respect to how you operate especially considering you know, the inordinate impact it is had on your company versus some of the others that I cover.

I am not saying I have heard this from other insurers, but I am curious if this is a thought. And it is not necessarily just to remove the volatility.

Maybe it is just even to remove some of the tails. So I am very curious on your thought process with respect to your investment program.

Right. Well, thank you, Darko.

And it is a really important question. it is a it is a great question.

And you know, the answer has not occurred to us is a resounding yes. And that, you know, this is something that this is something that we discuss as an executive team, and it comes up comes up at the board level.

You know? And particularly, we are at the board level.

We have representatives from our big shareholders who take this volatility themselves And so I think your observation is correct with respect to IFRS 17, or at least I would agree with it. That with IFRS 17, there is volatility for all life insurers And as we have benchmarked ourselves against the bigger public peers here, our volatility is more pronounced.

Now that is volatility in the based on our analysis in the statistics use of the word and not a euphemism for bad results. Because if you look at the aggregate of these--you know, whatever we are 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. And so you know, we do we have a couple hypothesis on why it is the case that we are more volatile and you know, it is probably a combination of things, but we are more heavily tuned proportionally to old fashioned balance sheet life insurance businesses than the big 4 Canadians who have, you know, as you know, and you spend a lot of time with them, you know, have evolved to have more of their business in capital light EBITDA type businesses and that is what is enabling them to push up ROEs into the 20% range.

And so some combination of that and just simply kind of the economies of scale the relative size of head office rather than relative to relative to the operating entities. But it is 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 in a pretty, you know, in a pretty satisfactory way. But we are seeing a lot of volatility.

And so the question becomes, what could you do to mitigate that? And you know, you talk about tails and, you know, potentially tactically you could talk about tails, but fundamentally, you know, what you can do is shorten up on your assets back in capital.

And, you know, make your assets back in capital that are not gonna move you know, more or less in line with your liabilities if you are getting ALM right. Know, shorten it up, get less volatility on that.

And become more indifferent or less correlated on a quarterly basis. And you know, what that basically means is taking away risk and taking away you know, the tenor premium on your capital and ultimately reducing your net income over a long period of time, whether it is your core net income or the aggregate of the actuals that fall out So we are playing with a North Star here of generating strong long term return on equity.

And so, you know, we are making a we have made the strategic decision for the time being that we are going to we are gonna optimize the economics for you know, 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. And so, you know, you are accepting that if you get a tougher mark like you did in the in the fourth or fifth week of March, you know, your book value dipped down to $10 a share and then market normalizes and you come back up to $11 But really what we are trying to do is say, okay, as we draw 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, and it is and it is an interesting 1.

1 that I have to think about as well. Because we do see even amongst just the 5 Canadian lifecos, let's say, We definitely see a difference in positioning and in returns.

Right? So and volatility.

So it is all connected. I appreciate the response very much.

Thank you.

Good 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 any 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, Robert.

We are still pushing to get it closed in Q4 if we can. But we may it may end up going into the first half of next year.

You know, because this is fundamentally an internal transaction. We can be nice to ourselves, so to speak.

And close it on the first day of a quarter, which really, really simplifies things from an accounting point of view. And so, you know, if we are not ready to go September thirtieth, you know, it moves the transaction into next year.

And so with that, it is hard for us to say--it is hard for us to give specific guidance around the noise and when it shows up because if a lot of the transaction costs and investments that we are making happen in the same quarter that we closed, then we can you know, it kind of all goes into the wash of the of the closing of the transaction. And, you know, we are gonna have all sorts of significant noise to look through.

Whereas, we are marching full speed ahead with this transformation kind of irrespective of when it is gonna close. And so 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 you I would not wanna give guidance on how much because we do not even know yet which ones that they would be.

So I think we are kind of--we are sticking to the story that we told last, you know, the last couple of calls where we have said, you know, 2027 once the transaction closes we see a path to the value of creation. We see the path to being in a kind of 14% ROE target next year and then going to 15% in 2028 as these strategic initiatives really kick in.

And so, you know, we are not we are not modifying that and feel comfortable with it given you know, even this quarter, we are closer to 14% than we are to 13%. And so really trying to keep our eye on the ball for you know, the results next year.

Great. And then in terms of realizing the synergies on that transaction?

Like, will--you know, do you expect to realize that maybe just kind of the timing of how you see that playing out. I think it is it is gonna be a process that builds over a couple of years.

So Some of this stuff would--some of the stuff would even start showing up as soon as soon as this year. It will be tough to parse through because you are you are spending money on the investments to get them.

But we have got some we have some quick wins quick wins already. And more will come through in 2027.

And then a lot of the things that are more around you know, process reengineering and consolidating on more modern technology is realistically goes into 2028. And so, you know, that is all built into, you know, pretty our pretty meaningful ROE growth.

Guidance from 2027 to 2028. Great.

Thanks for taking my questions. Yeah.

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 1 of us. Have a great day, everyone.