Good afternoon. My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to Sagicor Financial Company's First Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the number two. Thank you. Mr. George Sipsis, EVP, Corporate Development and Capital Markets, you may begin your conference. Great. Thank you, operator. Hello, everyone, and thank you for joining us today to discuss Sagicor's 2023 First Quarter. Our Q1 results, including the financial statements in the MD&A with the press release, along with a link to our live webcast, is available under the Investor Relations tab on our website at sagicor.com. This conference call is open to the financial community, the media, and the public with a reminder that the Q&A period is reserved for the financial research analysts. I would like to begin by referring 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 like to remind the audience that actual results regarding forward-looking information could differ materially. Please note that a detailed discussion of Sagicor's risk factors is provided in our MD&A and AIS available on SEDAR and our website. A discussion of the assumptions underlying our 2024 expectations is provided in our prior earnings release. Comments made in reference to the pending acquisition of ivari are made based on assumptions made in respect of business strategies, including economic conditions and other factors, and actual results may differ. Sagicor expects the acquisition to close in Q3 of 2023, pending satisfaction of regulatory and other customary closing conditions. Investors can find ivari's financials on the OSFI website. Unless otherwise noted, all dollar amounts referenced will be in U.S. dollars, consistent with our reporting practice. Joining me today is our Group President and CEO, Andre Mousseau, our Group Chief Financial Officer, Kathryn Jenkins, and Anthony Chandler, our Group Chief Controller. We'll begin with prepared remarks by Andre and Kathy, followed by a Q&A session. With that, I'll pass the call to our Group President and CEO, Andre Mousseau. Thank you, George, good afternoon, everyone. Thank you for taking the time to join us today. Q1 2023, we have been thinking about this date or at least this reporting period for a number of years. To release our financials under the new accounting standard on time on May 15th was the result of an enormous amount of work. I'd like to start by acknowledging and thanking everyone on our team who got the project through. I will give some brief remarks focusing on our group's performance for the quarter. Our results were dominated by volatility relating to IFRS 17's delinking of assets from our liabilities. Under IFRS 17, our net income to shareholders was $1 million, and our total comprehensive income to shareholders was $7 million. In our USA segment in particular, our assets backing liabilities appreciated in Q1, but the calculated value of our liabilities increased by $30 million more. We view this loss as an accounting mismatch and completely non-economic, something that would reverse over time, and we will continue to see whether we can refine these calculations over time to minimize this volatility. This volatility was offset by the price appreciation we had in our investment in Playa Hotels & Resorts. Beyond that, our business saw a generally solid performance with some instances of one-time expenses and some slightly below projected margins, which Kathy will elaborate on. Just for comparability's sake, our best estimate was that under IFRS 4, our net income to shareholders would have been in the range of approximately $50 million this quarter. I'll turn the call over to Kathy now to discuss the results, and then I'll come back to discuss our outlook. Kathy? Thank you, Andre, and hello, everyone. I'll start by echoing Andre's remarks about the tremendous effort over the last quarter to ensure a successful transition to IFRS 17 reporting standards. Turning to our results, total revenue for the quarter was $418 million, with insurance revenue growth across all our segments. We delivered strong total comprehensive income to shareholders of $7 million. Net income to shareholders was $7 million, excluding one-time costs relating to the IFRS 17 implementation, the ivari transaction, the build-out of our digital bank in Barbados, and an estimated $1 million of net experience loss. As Andre said, a strong gain in earnings backing surplus from our shareholding in Playa Hotels & Resorts was offset by mark-to-market volatility from the delinking of our asset and liability values due to IFRS 17. Put simply, the calculated value of our liabilities increased more than the appreciation of our assets backing liabilities, which caused accounting volatility that is not an indication of our underlying business economics. On to each of our segments. At Sagicor Life, our operating segment in the Southern Caribbean, revenues were $88 million, a 24% increase over the transition Q1 2022 figure. This was driven by solid new business sales, growing CSM, and an improved investment performance. Net income to shareholders was $6 million, a significant increase compared to half a million in Q1 2022, which was affected by asset price volatility. With this quarter's result being affected by continued minor negative experience from the in-force book of business. Solid sales drove new business CSM of $12 million. In addition, we recorded a $13 million increase in CSM due to restructuring of reinsurance contracts, which previously would have been taken into net income. These drove an 11% increase in total net CSM to $242 million. Sagicor's share of Sagicor Jamaica's net income to shareholders was $7 million, driven by strong individual life production and improving results in its group benefits business due to repricing of contracts in response to medical price inflation. Total net CSM remained relatively stable quarter-over-quarter as new business CSM of $8 million was mostly offset by amortization of CSM into profit. Net income at the investment banking division was impacted by the current capital markets environment in Jamaica and came in lower than expected. Moving on to Sagicor Life USA, new business production was light as we timed our production later in the quarter to take advantage of a more favorable competitive and interest rate environment, which moved settlement of that business into the second quarter. We will see significantly higher new business settle in Q2. Total net CSM was $205 million, a decrease of 4% quarter-over-quarter as a result of low new business CSM of $8 million from slower production in the quarter, more than offset by changes in estimates that adjust CSM and amortization of CSM into profit. Net income of $4 million had a significant amount of noise, with a mismatch of asset and liability value calculations presenting themselves here, offset in part by an appreciation of $9.5 million Playa shares, which are assets backing capital in this segment. The U.S. segment also experienced some higher than modeled surrenders related to older Fixed Indexed Annuities sold prior to 2017. This reduced CSM and net income by a minor amount. It also returned statutory capital to our U.S. subsidiary. We intend to deploy that capital into more profitable new business through the balance of 2023. In terms of other businesses, the profitability of businesses beyond our main segments were slightly behind plan in aggregate as our P&C business in the Southern Caribbean shifted from a slight profit in 2022 to a loss in Q1 2023, with higher claims ratios related to inflationary costs and repairs. I'll provide further detail on the transition to IFRS 17. Sagicor previously implemented IFRS 9 financial instruments in 2018. With adoption of IFRS 17 for Q1 2023, we amended our elections under IFRS 9, the most noteworthy being the designation of some financial assets that were previously accounted for at amortized cost and fair value through other comprehensive income that supported insurance liabilities to fair value through profit or loss. This has not changed the underlying economics of our business or our strategies, it has affected the presentation of our financial results to provide increased disclosures and better analysis to understand our business. Caution should be used when comparing 2023 results with the 2022 results under IFRS 17, as the 2022 results do not reflect the full optimization of our models under the new accounting standard. As we report subsequent quarters in 2023, we intend to introduce new KPIs and metrics, and the reporting itself will give a good sense of earnings overall. In particular, later in the year, we will publish a statistical supplement, including full sources of earnings by segment, which will provide greater visibility into the drivers of our profitability each quarter. We remain well-capitalized with $2.1 billion of total capital, which increased 1% over the prior quarter. Total capital includes the total net CSM of $690 million, as this is an important store of value and indicator of future earnings as it will amortize into net income throughout the life of the insurance contracts on our books. Our MCCSR ratio increased 32 percentage points to 308%. This ratio is adjusted to accommodate IFRS 17. We intend to produce LICAT by year-end 2023. I'll pass it back to Andre. Thank you, Kathy. Now a couple of minutes on our outlook. Through all this noise in Q1, we remain very positive about the prospects for our business, both near term and beyond. First of all, the macroeconomic prospects in aggregate where we operate are as positive as they have been for a long time. The economic outlook for the Caribbean continues to improve with significant growth in the economies in our major markets of Barbados, Jamaica, and Trinidad, driven by the return of tourist traffic, and in the case of Trinidad, continuing high global energy prices. Our markets there feel more vibrant than they have in years, and there'll be room for margin expansion in our group health and P&C businesses as we reprice those businesses to take into account inflation. The U.S. market, where we continue to grow, is benefiting from a higher interest rate environment, which is making our unit economics better, which are making new policies more attractive to customers, at the same time increasing our earnings on assets backing surplus. Second, our individual businesses have strong momentum. We believe each of our segments will substantially increase their CSM in 2023, and that will allow us to grow our earnings at double-digit rates in the years to come as we build up CSM in the wake of our conversion to IFRS 17. Third, we remain very excited about onboarding ivari, which will give us a new market for growth, increase our proportion of investment grade assets on our balance sheet, and provide significantly more segment net income to offset our third-party capital and head office costs. We continue to make good progress with the Canadian regulators and are targeting a close in the third quarter, which is now just around the corner. With all of these factors, we will reiterate our guidance with respect to our financials pro forma that acquisition in 2024. We anticipate to have shareholders equity of approximately $650 million-$725 million and CSM to shareholders of approximately $1.1 billion-$1.3 billion post-closing the transaction. This means total shareholders equity plus CSM to shareholders of approximately $1.8 billion-$2.0 billion. In 2024, in that first full year of ownership, we reiterate our expectation of a return on shareholders equity of approximately 14%-16%, high single digit CSM to shareholders growth, and double-digit net income to shareholders growth. Just mechanically, that points you to net income guidance of a fairly wide range of $91 million-$116 million, with a midpoint of $104 million for 2024. We expect to refine this guidance as the transaction closes and as the year progresses, but this gives you an order of magnitude idea of our expectations. With earnings in that range, we'll be in a very strong position with about a one-third dividend payout ratio to continue reinvesting in our business for future growth. With that, we're ready to start Q&A. George? Thank you, Andre. Operator, you can now open the lines. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a three-tone prompt acknowledging your request. If you would like to withdraw your question, please press star followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Meny Grauman at Scotiabank. Please go ahead. Hi, good afternoon. Andre, you referenced a few times the non-economic volatility impacting results. I'm wondering if there's anything that you can do to temper that volatility from an underlying perspective. In terms of your thoughts on providing maybe adjusted numbers to kind of help us look through that volatility. Sure. We are going to see whether we can improve the models. We were advised by, you know, a big four firm and worked hand-in-hand in that with them in formulating the models that were crafted to minimize this known volatility. It, it's turned out to be a little bit more than than what we had hoped. We think we're coming from a good principled place. That said, we are going to work to see whether we can make model refinements and make that, make that tighter. You know, it's non-economic, it should go both ways. There should be quarters in which net income would be overstated as opposed to understated as it is in this quarter. Still, we'd like to minimize that volatility. That's gonna be something we're gonna be working on for the rest of the year. We, you know, we have taken a very, very blunt object at putting forward adjusted earnings in our press release with the $7 million number for the quarter. That methodology as well as the rest of the source of earnings methodology we intend to refine over the year. We have some working models internally, but at the point where we were to get the release out, we had confidence in the aggregate numbers, but we didn't wanna put out granular adjustments until we were sure that everything was allocated in the right place. So we'll be getting there later in the year. Got it. Just a few questions on the U.S. business. You referenced the deferral of production, and if I heard you correctly, it sounds like the deferral is to Q2, so we'll see that come through relatively soon. I'm just wondering if you could provide a little more detail in terms of the factors that led you to defer that production. I think you referenced the investment environment and competition, but just if you could give us a little more detail in terms of what you saw in the quarter and how that's developing into the new quarter. Sure. We've talked about this on previous calls. You know, we are pretty active in that market and in terms of pricing that annuities business. You know, we're optimizing to maximize our production when the spread rate is the most favorable, and that's a function of where investment spreads are and a function of where competitive rates were. We saw that in the second half in the quarter, the competitive environment when you took into account where we could invest, it was better in March than it had been in the first couple of months of the quarter. When a policyholder makes a submission, it can take two to five+ weeks for that business to settle and actually come onto our books. We had a target in mind for first quarter production, which we got from a submitted point of view, but much of it settled in the second quarter. You know, I can tell you that for the first six weeks of Q2, we had, you know, order of magnitude, 2.5 to three times the settled business as we had settle in all of Q1. That, you know, that run rate may not continue exactly through all of Q3, or through all of Q2, but we know that Q2 already is multiples of what Q1 was. That where that'll get us is through the midpoint of the year, more or less where we expect it to be for year-to-date production. Thanks. Then sticking to the U.S., Kathy, I think you talked about higher surrenders on fixed annuities, and I assume that's related to the rate environment. Just wanted to confirm that that's really what's going on here, and then just wanted to understand the dynamics going forward if this could be a risk going forward in this rate environment. Is higher rates gonna lead to further pressure from surrenders? Just wanted your comments on that. This was in a cohort of old business on which were Fixed Indexed Annuities from kind of, written prior to 2018. They've been on the books for a while. They're out of the period where there are surrender charges on them, which is why you're seeing a little bit of eating into the margins. You know, these index, these old index policies have a bit of the double whammy where, you know, there's a higher interest rate environment, but they're also not getting very good equity participation either. You know, often you see policyholder on this sort of behavior, on this sort of product kind of driven by the rearview mirror. We could see continued a little bit of that later in the year. I wouldn't say it was accelerating at all. But it may be that we have a little bit more of this experience. you know, what the way we're managing our U.S. business, and Kathy referred to this, is really on a capital allocation basis. As we get these policies back a little bit earlier than we thought, we'll have more capital in that business to go and redeploy. All things being equal, we'll turn up the production a little bit more. I think it's important to state though that this is on the older business, and that we've seen our recent vintage MYGA business, which is where the majority of our production has been for the last three years and where we have the benefit of surrender charge protection. That has really hung in right in there, and we don't see any alarm bells on that at all. Okay. Just finally for me, just in terms of an IFRS 17 related question related to the U.S., you continue to talk about investment portfolio optimization in the U.S., and just wondering how IFRS 17 impacts that, if at all. Is that, does that change anything in terms of this project to optimize the investment portfolio? The short answer is not really. We're managing our U.S. business on an economic basis. When we're thinking of optimizing the portfolio, we're thinking of risk-adjusted and capital-adjusted IRRs. You know, we kind of see the quarterly emergence of net income as a bit noisy, obviously. If we can increase the risk-adjusted spreads that we're getting on our business in a capital efficient manner, it will make its way through net income eventually. We're not managing for quarter to quarter to try and match that net income volatility through the investment book because you'd always be chasing yourself. We're thinking in terms of long-term return on capital. Understood. That's it for me. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Next question from Darko Mihelic at RBC Capital Markets. Please go ahead. Hi. Thank you. Before I get to my questions, I kind of felt that the answer on the Fixed Indexed Annuities is a little bit shy of what I was hoping to hear. Maybe, Andre, if you just revisit that for a moment. You suggested that you could see maybe a little bit more later in the year. Is that because the portfolio has shrunk to nothing, or is there some other reason that makes you confident that you won't get more surrenders going forward? Because as I see it, every year that goes by, people will fall into the category where they can surrender without any charges, and so this is still a risk going forward. Is it that the fixed annuities block is now so small that it doesn't matter? It's not so small that it doesn't matter. You know, this is a book of older policies. You know, we have our actuarial tables, which would tell us, here's the rate at which we would expect the size of that portfolio to decay. What we are talking about in this instance is where we modeled to have some surrenders in the quarter, and the surrenders were slightly faster than what we had modeled. The book of business is still relevant. It's been on the book and on the books for some time, and we've taken profit out of it. If there continued to be, surrenders that were faster than what we would model, then that would come out of. Because it's so old, some of it, goes straight into net income, and some of it, presents itself as a reduction in CSM. Okay. what is it then that makes you think that the behavior will change? I think that the environment seems to have stabilized. We're not seeing at this point an acceleration in the behavior. Okay. Is there something that's being done, for example, like, are these people being advised by brokers or anything like that? Possibly. In other words, are they getting advice to surrender is what I'm asking? Usually the buyers of these products will be working with advisors. We don't see necessarily that a surrender comes through an advisor or whether someone does it of their own accord. You know, very often the original advisor who was involved in a sale will be involved in replacing something in a policyholder's portfolio. As we're working with our channel, it's about continuing to stay in front of the advisors. If they make the choice to trade out of something, where they can get a higher guaranteed rate, for example, that we're in front of them and they choose something else from us. Okay. when did you stop selling Sorry, the Fixed Indexed Annuities? What year was that? We still sell them. But we still do sell them, but they've been greatly de-emphasized over the last couple of years. This was a majority of our book going back to 2017 and before that. It's been in the last 5 years that we've pushed more towards the MYGA products, which are, you know, more simple, low commission, easier to administer. Okay. Thank you for that. I just wanted to further my understanding of that. Just a couple of other questions as well. One is just for an overall understanding of the result. Kathy had mentioned that, you know, assets moved and liabilities moved more and thus it created a bit of a mismatch and the noise, the accounting noise we'll call it. I mean, I guess just fundamentally so I can understand that a little bit better, what was the surprise? Was it that the assets couldn't match the movement in the liabilities, or was it simply that the liabilities reference curve moved as aggressively as it did? It's interesting way to look at it, actually. I mean, the asset prices are observable. Yes. You know, the surprise, therefore by definition, came through the calculation of the liabilities. The assets performed well in Q1. You know, the asset classes we're in generally were good and they're traded up. We had no observable, no observable credit events. I guess by definition it's in the liability side. The, the surprise would be that the, that the discount rate went down so much that the value of the liabilities increased more than more than the assets went up. Okay. Interesting. Okay. Now just I wanted to ask you just to help me better understand, and maybe we can use the USA segment as a way to sort of template or book or sort of walk me through what, you know, how the result came to be. There are some things that look a little peculiar to me when I look through it. Again, without a you call this Source of Earnings, I think the other life closer are now calling it Drivers of Earnings, irrelevant, I guess the. Without seeing one, I wanna sort of somehow reconcile what I'm seeing here between the contractual service margin and the insurance result. For example, in the U.S. business, what we see is we see the CSM that was recognized in profit or loss for the period, and again, using the U.S. as an example of $9.4 million. When I turn, then I scroll up and I look at the insurance service result, it's a very big negative. Presumably on top of the CSM, there would've been a risk adjustment and a few other things moving around. Maybe you can just walk me through or just conceptually how we can recognize some contractual service margin, some risk adjustment, and then end up with a fairly large negative insurance service result. You'll see, there's a certain amount coming from the, from negative expense in reinsurance contracts. Yep. You see that in the results. Part of that is you'll have seen that our reinsurance assets went down, contract assets, so changes in discount rates, so we saw a negative coming through there. The other thing we saw was we saw a significant reduction in some of our reinsurance recoveries. One side of, the other side of that is in the investment income. We had options related to recoveries, to policy holders. While we saw a reduction in the insurance service results through that line, the net expenses from reinsurance contracts, there's some noise between our insurance service results and our investment income results to a certain extent. Okay, let me follow up with you on that a little bit later. Just to be clear, I guess where I'm coming from is, if I know there's nine and a half million of contractual service margin, is there any significant risk adjustment coming through as well? Sorry, let me grab that. Yes. There's a risk adjustment of around $6 million. Yes. Overall, not just for the U.S. Okay. For the U.S., about another $1 million. Okay. It's relatively small relative to the contractual service margin. Yeah. Okay. I can now reconcile $10.4 million in the insurance result. Would that be net? Would the CSM and the RA be net of the $18.8 million that we see on that in terms of insurance services expenses? I just wanna make sure that I understand if it's net of that, then I will key in on the reinsurance expense. Before I get there, I just wanna understand if the $21.2 and the $18.8 are like a net of the CSM and the risk adjustment. I believe so. Do you follow? Yes. Okay. That's what I figure. Okay. I got you. Okay. We're getting relatively technical here for a call. Yeah. I think we should, I mean, we can proceed here and we can also, you know, sit down offline, at some point and work our way through it. Very big picture, you know, it's our sense that our insurance service result is understated and that the investment earnings are overstated. There are some instances where what we think of economically are related to the policies and the policy holder behavior, which should be combined in the insurance service. Where we're making the money is ending up as Investment income. Where we're passing it back to the policyholder ends up as a negative insurance service result. This is one of the things that we've been working on over the past couple of weeks with the auditors, and we think it's a bit of an unintended consequence of how they're allocating these different lines in the ledger. In this quarter at least, it has made the insurance service line understated and overstated our investment earnings. Okay. I think I follow that logic, yes. Then just one last question, just to a refresher back here on the CSM. The change in estimate that adjusted the contractual service margin was related to those surrenders. I just wanted to better understand. So that was the big proportion of the drop. What I wanna understand a little bit better is the improvement of, or the sales, which is the $8.2, which is significantly lower than last year, which is $22.9. Do you look at those two as a sort of a net thing? Or how do you? Like what I, what I wanna better understand is obviously you want to grow the contractual service margin, and clearly it's a function of production. I'm just curious on if your view is that there won't be any more surrenders later on, that changes to adjust the CSM are essentially should be more like a zero, we should more or less see contracts recognized in the year pop right back up to like, I don't know, I don't know if I wanna say the same as last year, 2022, maybe things are different. I should think of them on a net basis or not at all. The CSM amortization, we would expect to be constant. The. You know, if you go back to my answer to Manny's question, you know, already through the third quarter or through the six weeks of the second quarter, we'd, we've seen significantly more than double the production. All things being equal, if the spread, that would be proportional on the impact of new insurance business. In Q2 and in the rest of the year, we would expect for the US to have the net of those two numbers be significant, significantly positive. That, you know, gets us back to our, you know, mimicking the growth in the U.S. business, the growth in the assets under management. Okay. Just very, just so you recognize the source of my question, it's because last year and this year, in both years you have negatively adjusted the CSM. Where I'm Like essentially what I'm driving at is, you know, it got a little bit worse and the other, you know, obviously you sold less in the quarter. What I'm looking for is that, you know, the adjustment to the CSM starts to really decline significantly while you have an increase in production. That to me sounds like the what I'm hearing. I'm paraphrasing what you said, is that kind of? Is my understanding correct there? I would say the insurance experience gains and losses, we would think should tend to zero, over time. Otherwise, you know, we should go and change our assumptions. We... Yeah. Okay, great. Just these reinsurance contracts that are causing this, at some point I'd like to follow up with you a little bit on that. It's probably better to do that offline. Yeah. again, this is, accounting and allocation between lines. Yeah, fair enough. Thank you very much. Thank you. There are no further questions. I will now turn the call back over to George Sipsis for closing comments. Thank you, operator, and thank you everyone for joining the call today. A replay of this call will be available for one month on our website, and a transcript will be posted as soon as possible. If you have any additional questions, please do not hesitate to reach out to any one of us. As a closing note, as mentioned in our earnings release, Sagicor's annual and special meeting of shareholders will be a hybrid meeting via live webcast and in person in Barbados on Friday, June 16th. Further details are available on our website at sagicor.com under the Investor Relations tab. With that, thanks again for your participation and interest today. Have a great day. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.