NCB Capital Markets Ltd. - Data Subject Request

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Jamaica’s economy is facing a dual shock from post–Hurricane Melissa recovery efforts and the external fallout from the US-Iran war, which has triggered a surge in global oil prices. Domestically, premium gasoline rose about 17% between February 26 and April 16, notably lower than the 40–45% increases in Brent and West Texas Intermediate (WTI), highlighting partial insulation from global energy volatility.
This divergence is driven by government policy, specifically a J$4.50 weekly cap on fuel price increases, which has constrained inflation pass-through. Nonetheless, Petrojam Limited has consistently applied near-maximum weekly adjustments, pushing premium gasoline prices from J$157.3/litre to J$184.1/litre over the period, alongside broad-based increases across all fuel categories.
The capped pricing regime has proven fiscally unsustainable amid hurricane-related spending pressures, leading Daryl Vaz to announce the removal of the cap effective April 22, 2026, replacing it with a three-tiered pricing system more aligned with global markets. Of note, the cap has already resulted in J$1.3Bn in losses for Petrojam, with projected losses of J$11.8Bn if extended, costs ultimately borne by taxpayers, while higher fuel prices are expected to boost tax revenues.
Inflationary pressures are building, with the consumer price index (CPI) rising 0.3% in March to 4.3% year-over-year (YoY), and fuel inflation accelerating sharply (7.2% YoY; 5.13% MoM). Currently, the Bank of Jamaica (BOJ) expects inflation to climb further, potentially reaching 6.5% by the end of 2026, and breach its 5% ±1% target band, a key reason it maintained its policy rate at 5.50% in March despite growing price risks.
Although rising fuel costs and second-round inflation effects may increase public dissatisfaction and sporadic protests, widespread unrest is not anticipated. Historical patterns following the 2022 oil shock suggest limited disruption, while current conditions, that is, stable unemployment and relatively contained inflation in early 2026, support social stability, even as political pressure mounts, including calls for tax reforms.
Nevertheless, fiscal pressures are set to intensify, with the deficit projected to widen to 5.4% of GDP in FY2026/2027 due to hurricane recovery, though removing the fuel cap should ease some strain via higher tax revenues.
That said, Jamaica retains strong fiscal buffers, disaster financing tools (including a fully paid-out disaster bond), solid foreign reserves, and international support, underpinning confidence that debt can still fall below 60% of GDP by 2032, despite elevated risks tied to prolonged high oil prices or increased social spending demands.

(Source: BMI, A Fitch Solutions Company)

The Issuer/ Corporate Credit ratings of Sagicor Group Jamaica Limited (SGJ) have been reaffirmed by Caribbean Information and Credit Rating Services Limited (CariCRIS).
On the regional scale, SGJ retained its CariA+ rating (Local Currency) and CariA (Foreign Currency Rating) on the regional rating scale. Its local ratings indicate that the level of creditworthiness of SGJ is good relative to other obligors in the Caribbean.
It also retained and jmAAA (Local Currency Rating) and jmAA+ (Foreign Currency Rating) on the national scale. Its local currency rating indicates that SGJ’s creditworthiness is the highest among other local currency debt obligors in Jamaica.
Notably, CariCRIS assigned a stable outlook on the ratings to reflect a high likelihood that SGJ will remain profitable over the next 12 to 15 months. The ratings also include a 1-notch credit uplift for the high likelihood of support, if needed, from SGJ’s ultimate parent company, Sagicor Financial Company Limited (SFC).
SGJ’s ratings and outlook reflect its leading market positions and strong brand equity, which continue to support its consistent and healthy financial performance in 2024, despite a fall in profitability. This, together with the Group’s continued comfortable capitalisation levels as well as a strong and comprehensive Enterprise Risk Management (ERM) framework, supports the ratings.
Nonetheless, these ratings are tempered by the interest rate environment. This could challenge SGJ’s Asset Liability Management (ALM) position and its significant sovereign risk exposure to the Jamaican economy, which could present downside risks to profitability.
Moreover, the ratings may be lowered in the event of Economic weakening, causing a >70% decline in investment portfolio and/or weak asset coverage, combined with deteriorating performance metrics (combined ratio >90% and cost-to-income ratio >80%). Conversely, a stronger Jamaican macroeconomic performance, leading to improved sovereign ratings and lower debt-to-GDP, could improve the ratings and/or Outlook. Likewise, the successful completion of the merger¹, which would enhance scale, competitiveness, and earnings capacity, could have the same effect.
SGJ’s stock price has declined by 0.5% since the start of the year to close at $39.97 on Monday, April 13, 2026. At this price, the stock trades at a price-to-book (P/B) ratio of 1.4x, above the Main Market Financial Sector average of 1.1x.

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^{^[1]}SJ announced it is merging with Sagicor Life Inc. (SLI), a leading provider of life, health, and general insurance solutions across the Eastern and Southern Caribbean. The merger is expected to create greater scale and reach by bringing Sagicor’s Caribbean operations together under a single holding structure, Sagicor Group Caribbean (SGC).

(Source: CariCris)