• Its subsidiaries Suramericana and SURA Asset Management have reinforced their support for their clients and fund members, by transforming their operating and service models, using technology as an enabling factor.
• Our Business Group has reaffirmed its commitment to safeguarding jobs, making a contribution to the economic recovery while sponsoring solidarity initiatives through the SURA Foundation.
• The growth in income from written premiums, services rendered as well as fees and commissions reduced the accounting impact of the lower returns of its investment portfolios on the Group’s bottom line at the end of Q1 2020..
• Both Grupo SURA and its subsidiaries are amply demonstrating that they have both the liquidity and solvency required to overcome the effects of this pandemic.

Grupo SURA duly reported, this past Friday, its consolidated results for the first quarter this year, amid the prevailing market volatility as a result of the current worldwide pandemic. Both the Holding Company and its Subsidiaries, Suramericana and SURA Asset Management, have demonstrated a robust financial position, the ability to adapt and transform their different lines of business as well as the important role they play for millions of people and companies throughout the region by tackling and overcoming the effects of this COVID-19 crisis.

"In the midst of the global pandemic, we are substantiating our Business Group’s capabilities in safeguarding the jobs of 30 thousand people, ensuring our business continuity and creating added value for all our clients throughout the region. Furthermore, our assessments of the current situation show that we have the strength, liquidity and solvency to tackle and overcome these challenging times for all mankind", stated Gonzalo Pérez, Chief Executive Officer of Grupo SURA.

Consequently, the Companies belonging to the SURA Business Group, have abided by the current lockdown, having made the required operating adjustments, bolstered  their remote channels, enabled on-line tools and developed more services; at the same time, they are capitalizing on the lessons learned and evaluating all those opportunities arising from this contingency as well as the role that the business sector is to play in reviving social and economic conditions throughout the region.

Measures taken in response to the pandemic

In this respect, Suramericana's insurance subsidiaries have provided more flexible means and conditions for taking out and paying insurance premiums, having included this pandemic in the Health Care and Life Insurance coverage, where before this was not specifically covered. They have also expanded their capacity to provide their assistance and services, developed new solutions, while at the same time providing knowledge for SMEs through its regional SURA Enterprises program both during the lockdown and now that certain sectors are returning to work.

In the case of SURA Asset Management, its Pension Fund Management firms, have brought forward pension payments, increased their on-line transaction channels and reinforced their performance in terms of the client support and advisory services offered. As for its Savings and Asset Management lines of business, these are offering regular market updates as well as evaluating other different investment options for private individuals and the institutional segment.

Among the different measures taken in Colombia, Seguros SURA increased its  health care capabilities, expedited its COVID-19 testing efforts in terms of taking samples and lab processing ; its Workers’ Compensation Subsidiary (ARL) implemented in record time a well-differentiated model for facilitating care measures for millions of workers in the essential service industries as well as all those other sectors that are just beginning to go back to work. 

But beyond our different lines of business, we have allocated to date, through our Companies and the SURA Foundation,  nearly COP 13,278 million (USD 3.3 million) to public and private initiatives in all 10 countries where we are present; this for the purpose of helping hospitals and clinics, purchasing and delivering protective equipment for medical personnel and providing food to 100 thousand underprivileged families. The employees of our entire Organization have joined forces with these initiatives having donated more than COP 422 million.

Financial strength, resilient growth and external shocks

Current projections and risk assessments show that Grupo SURA and its Subsidiaries maintain adequate liquidity and solvency, thanks to the sound cash position enjoyed by all three Companies; as well as a lower exchange rate exposure and the expected dividends on the part of the holding, the liquidity of portfolios held by Suramericana and the solvency of SURA Asset Management, as relates to the amount of Assets under Management (AuM) held.

On the other hand, the financial results for the first quarter of the year have accentuated the benefits of having diversified our portfolio in terms of sources of income and geographic location, as well as the resilience of our different lines of businesses compared to the same period in 2019. We continued to post increases with revenues from retained insurance premiums (9.9%), asset management fees (6.4%) and health care services (25.4%). This offset part of the decline with investment returns (-104.1%), given the depreciation of our financial assets, and lower revenues obtained from associates via the equity method (-72.1%), especially from Bancolombia, due to higher loan provisions.

In the case of Suramericana, it is well worth noting the increase of 14.6% in revenues, thanks to the growths obtained in the Life Insurance (18%), Property and Casualty (6.1%) and Health Care (25.3%) segments, with net income amounting to COP 106,697 million (USD 30.2 million), for a drop of 9.8%, largely due to the effect of the portfolio valuation in Argentina.

 "Amid this contingency we are accelerating our strategy in our role as a trend and risk management company while having adapted to this current new reality in terms of our business operating model, as well as developing and enhancing the portfolio of solutions offered. Our focus is on delivering the skills and knowledge that people and companies need as we continue to provide our support not only in the past lockdown but now as we are gradually reactivating our productive activities," stated Juana Francisca Llano, Chief Executive Officer of Suramericana.

On the other hand, SURA Asset Management recorded a total of 20.5 million clients at the end of Q1 2020, which was 3.5% more than a year ago, and the volume of AUM held obtained a growth of 6.5%, for a total of COP 473.6 trillion (USD 116.512 million). The Company also recorded sustained growths of 4.5% and 19.8% in fees and commission income from its Mandatory Pension and Voluntary Savings lines of business respectively. However, it did sustain a net loss thereby subtracting COP 129,870 million (USD 36.7 million) from the final consolidated bottom line, this due to the depreciation of the investments belonging to the Company's own portfolios in the Mandatory Pension business (legal reserve).

"Although our results have been impacted by the recent volatility on the global capital markets, taking a long-term view and diversifying the portfolios and funds we manage is now acquiring a greater relevance. Meanwhile, we have reacted promptly in adapting our operations and channels so as remain close at hand to our clients throughout the region by providing our advisory services and recommending different savings and investment alternatives," explained Ignacio Calle, Chief Executive Officer of SURA Asset Management.

However, Grupo SURA's consolidated operating income decreased by 6.6% to COP 4.7 trillion (USD 1,339.4 million), while expenses increased by 6.3%, driven by higher costs of health care services, leading to a 71.1% reduction in operating income, which stood at COP 244,128 million (USD 21.5 million). The depreciation of the Colombian peso, coupled with the pandemic and drop in oil prices, also had a corresponding effect on a net loss amounting to COP 75,956 million (USD 69 million), which was 114.9% lower than the net income figure poste at the end of the same period last year.

As an Organization we are adapting to this new reality, however we sincerely believe that we have the knowledge, talent and strength required for tackling this situation, identifying new opportunities and continuing to advance with the transformation of our different lines of businesses, all this as part of our overarching purpose to create greater well-being and sustainable development for all the Latin American people.” stated Gonzalo Perez.