Post on 25-Jul-2020
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I NSURANCE RETI REM ENT I NVESTMENTS
ANALYST BRIEFING
GUARDIAN HOLDINGS LIMITED
1 GUARDIAN DRIVE
WESTMOORINGS • TRINIDAD
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Financial Results – Half year ended 30 June 2015
Analysts’ Briefing
31 July 2015
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RAVI TEWARIGROUP CHIEF EXECUTIVE OFFICER
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CONSOLIDATED FINANCIAL HIGHLIGHTS
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2014 includes the following non-repeating income:
$12MM from Discontinued Operations
$9MM from Pointe Simon NCI
On a pre-tax basis, profits improved 6%
HY 2015$211MMPRE TAX PROFIT
HY 2014$199MMPRE TAX PROFIT
TT$'MM
Half Year
June 2015
Half Year
June 2014 Var $ Var %
Reported
Profit for the year 168 174 (6) -3%
Non-controlling interests - (9) 9 N/A
Profit to equity shareholders 168 183 (15) -8%
Basic EPS $ 0.72 $ 0.79 ($0.07) -9%
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LIFE HEALTH AND PENSION
ASSET MANAGEMENT
STRATEGICALTERNATIVE INVESTMENTS
GLOC(100%)
GLL(100%)
FATUM LIFE
CURACAO(100%)
FATUM LIFE
ARUBA(100%)
FATUM HEALTH(100%)
RGM(33%)
ECGPC(15%)
LAEVULOSE(100%)
GAM(100%)
BUSINESS SEGMENTS
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GAM MUTUAL FUNDS
PROPERTY & CASUALTY
ROYALSTARASSURANCE
(26%)
FATUM GENERAL
TNI(54%)
CURACAO(100%)
ARUBA(100%)
TRINIDAD(100%)
BARBADOS(100%)
BOOGAARD GROUP(100%)
GUARDIAN RE
(100%)THOMA& KRUIT (100%)
GGIL(100%)
GGIJL(100%)
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• We have the premiere portfolio of non-bank financial institutions in the Caribbean
• Number one market position in Trinidad and Tobago
• Either number one or number two market position in all other markets
• Diversified by line of business: life, health, pensions; general insurance;
and asset management
• Judiciously diversified by country
• Diversified investment portfolio
DIVERSIFICATION OF BUSINESS UNITSPRODUCES CONSISTENT RETURNS AND GROWTH
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MERGERS AND ACQUISITIONS
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Boogaard Group
In February 2015, the Group signed a Share Purchase Agreement for the acquisition of Boogaard Group, a Dutch Caribbean insurance broker
Final approval from the respective Central Banks is expected shortly (Consideration ANG 22MM)
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POINTE SIMON ON COMMERCIALLY VIABLE FOOTING
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Condo Block
• Sold 35 of 45 units at prices consistent with valuation
• Utilization of French tax incentive to facilitate sales and improve returns
• Outright sales being pursued for remaining units
Tower Block
• 18 stories tall
• Leases on 2 stories signed
• Lease of 4 ½ stories to France Television signed in April
• Discussions are continuing on leases for further 6 floors
Hotel Block
• Sale closed for €21.2 m at €1.1 m profit
• Vendor financing for €13.9 m
• Will maintain 24% equity in hotel
• Opening in Q4 2015 under one of 2 major brands
Retail Space
• Demand is strong from major retail brands
• We expect full occupancy coincident with opening of hotel
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SYSTEMATIC DEPLOYMENT OF STRATEGY
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Drive strong organic sales
Growth by acquisition
Operational efficiency
Build scalable, centralized group infrastructure
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KERRI MAHARAJGROUP CHIEF FINANCIAL OFFICER
Consolidated Financial Highlights
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SUMMARY CONSOLIDATED FINANCIALS
Note 1
Note 2
Note 1Net insurance activities increased $80MM, 30% mainly in LHP segment (includes Jamaica reserve release +$60MM net)
Note 2-$12MM lower Foreign exchange results and -$16MM lower Investment income
TT$'MM
Half Year
June 2015
Half Year
June 2014 Var $ Var %
Net income from insurance activities 347 267 80 30%
Net fair value (losses)/gains (9) 29 (38) -130%
Net income from other investing activities 388 419 (31) -7%
Net income from all activities 726 715 11 2%
Operating expenses (453) (463) 10 -2%
Finance charges (70) (64) (6) 9%
Share of associate results 7 11 (4) -36%
Profit before taxation 211 199 12 6%
Taxation & other (43) (37) (6) 16%
Profit from continuing operations 168 162 6 4%
Net gain on discontinued operations 0 12 (12) -99%
Loss attributable to NCI - 9 (9) -100%
Profit to equity shareholders 168 183 (15) -8%
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4,007 4,365
4,911 5,011
3,131 2,905
0
1,000
2,000
3,000
4,000
5,000
6,000
2011 2012 2013 2014 YTD Q2/14 YTD Q2/15
GPW ($million)
GROSS PREMIUMS WRITTEN
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HY 2015 GPW was dampened by two factors:
i. Reported LHP lower from change in accounting treatment for a portfolio of health business (Impact -$94MM). Underlying LHP +$46MM, 3%
ii. P&C lower mainly due to international partners (partly timing)
8% CAGR
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GEOGRAPHIC DISTRIBUTION OF REVENUE
Geographic distribution continues to be stable, with approximately 50% earned in Trinidad and Tobago
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Excludes realized and unrealized gains
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ANAND PASCALPRESIDENT GUARDIAN LIFE OF THE CARIBBEAN
Life, Health and Pensions (LHP)
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LIFE, HEALTH AND PENSIONS (LHP)
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LIFE, HEALTH AND PENSION
GLOC(100%)
GLL(100%)
FATUM LIFE
CURACAO(100%)
FATUM LIFE
ARUBA(100%)
FATUM HEALTH(100%)
The leading life insurer in the Caribbean:
# 1 In Trinidad Over 600 dedicated life sales agents GLOC AM Best A- Excellent rating
# 2 In Jamaica Over 300 dedicated life sales agents
Fatum has approximately 50% of the Dutch Caribbean market Sales primarily broker-driven
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ANNUALIZED PREMIUM INCOME
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225 207
303 278
118 135
65 68
71 58
2825
120 123
120
116
118 118
410 398
494 451
264 278
-
100
200
300
400
500
600
2011 2012 2013 2014 YTD Q2/14 YTD Q2/15
Settled API ($million)
GLOC GLL FATUM
An overall 5% improvement vs Q2 2014
Strong Q2 by GLOC
2015 is a Sales Convention qualifying year
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1,347 1,427
1,762 1,836
1,038 970
552 631
557 490
253 252
403
471
476 496
376 398
2,302
2,529
2,794 2,821
1,668 1,620
-
500
1,000
1,500
2,000
2,500
3,000
2011 2012 2013 2014 YTD Q2/14 YTD Q2/15
GPW ($million)
GLOC GLL FATUM
LHP – GROSS PREMIUMS WRITTEN
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CAGR 7%GPW showed a decline of 3% vs Q2 2014 mainly due to a change in accounting policy in GLOC in Dec 2014 on Reinsurance portfolio
Excluding that change GLOC showed a 3% growth over 2014
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1,589 1,737 2,030 2,154
1,054 1,087
806 925
832 747
379 359
635
751 714 732
453 477
3,029
3,413 3,576 3,633
1,885 1,923
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2011 2012 2013 2014 YTD Q2/14 YTD Q2/15
Revenue ($million)
GLOC GLL FATUM
LHP – REVENUE
17Excludes realized and unrealized gains/losses
CAGR 6%Revenue is largely driven by premiums
Investment income continues to be pressured by the low interest rate environment, especially in Trinidad
Excluding the accounting policy change, revenue is up 5% over Q1 2014
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RICHARD ESPINETEXECUTIVE DIRECTOR / GROUP PRESIDENT PROPERTY & CASUALTY
Property & Casualty (P&C)
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PROPERTY & CASUALTY (P&C)
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PROPERTY & CASUALTY
ROYALSTARASSURANCE
(26%)
FATUM GENERAL
TNI(54%)
CURACAO(100%)
ARUBA(100%)
TRINIDAD(100%)
BARBADOS(100%)
BOOGAARD GROUP(100%)
GUARDIAN RE
(100%)THOMA& KRUIT (100%)
GGIL(100%)
GGIJL(100%)
An established and distinguished Property & Casualty Insurer, long recognized as the strongest and largest indigenous Caribbean Insurer
Profitably underwrites in every English-speaking Commonwealth country in the Caribbean and the Dutch Antilles
Market Leader in the following territories:
Trinidad & Tobago
Jamaica
Dutch Antilles
Grenada
Overall Caribbean
Thoma & Kruit provide a stable source of fee income
Boogaard- proposed new broker acquisition in the Dutch Antilles will be an additional source of fee income
Financial strength and consistently applied underwriting discipline are competitive advantages
Consistently delivers high profit margins Successfully manages the underwriting cycles Reputable claims service Good geographic spread Robust reinsurance program Strong global network
Compliant with the revised insurance act before the T&T parliament
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1,120 1,267 1,315 1,387
977 826
287 238
402 431
249 251
228 257
326 297
189 175
70 75
74 75
49
33
1,705 1,837
2,117 2,190
1,464
1,285
-
500
1,000
1,500
2,000
2,500
2011 2012 2013 2014 YTD Q2/14 YTD Q2/15
GGIL FATUM GGIJL GRE
P&C – GROSS PREMIUMS WRITTEN
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9% CAGRGPW of $1.3Bn decreased when compared to the previous period mainly as a result of:
premium reductions on multinational accounts obtained through our global network partners
the fall in premium rates regionally and internationally
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COMBINED RATIO -PROPERTY & CASUALTY
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The Combined Ratio of 80% continues to be consistently below 90% over the last 5 years, reflecting the P&C Group successfully combining:
Strong technical underwriting discipline resulting in a strong net claims ratio of 39% (2014: 36%)
Operating expense discipline resulting in an expense ratio of 42% (2014: 41%)
Its distinctive reinsurance strategies
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BRENT FORDGROUP CHIEF INVESTMENT OFFICER / GROUP PRESIDENT ASSET MANAGEMENT
Asset Management (AM)
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ASSET MANAGEMENT
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ASSET MANAGEMENT
GAM(100%)
GAM MUTUAL FUNDS
Acts as investment manager for the group
Offers investment opportunities to retail and institutional market 13 independent mutual funds – covering all asset classes
Financial advisory services to high net worth individuals –Discretionary Private Wealth Service
Non-Discretionary Trading Accounts – client directed trades
Effective July 1, 2015, GAM was reorganized as follows: Guardian Group Trust Limited – (CBTT & SEC) will perform trust
services and non-bank finance activities
Guardian Asset Management & Investment Services Limited –(SEC) will perform roles as investment adviser, broker-dealer and underwriter
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ASSETS UNDER MANAGEMENT
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* GAM plus GAM Mutual Funds
8.2
8.9 9.3
9.7 10.0
-
2.0
4.0
6.0
8.0
10.0
12.0
2011 2012 2013 2014 YTD Q2/15
(TT$Bn)
6% CAGRAssets under Management show an increase of 3% in 2015.
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AM – GAM REVENUE & PROFITS
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60.0 61.9 60.4 58.9
28.8 28.4
19.7 23.1
20.6 20.7
9.6 8.2
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2011 2012 2013 2014 YTD Q2/14 YTD Q2/15
Revenue & profitability
Revenue ($MM) PAT ($MM)
Profit After Tax for Q2 2015 is lower versus prior comparative period
Revenue for Q2 2015 is marginally lower from Q2 2014
- Lower investment income and MTM/FX
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INVESTMENT MIX
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Group’s investment mix shows no major changes; more cash and deposits mainly due to lack of new issues coupled with net premium income growth
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QUESTIONS
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