Analysts’ Briefingmyguardiangroup.com/uploads/announcements/Brokers_presentatio… · i. Reported...

+ + INVESTMENT INSURANCE RETIREMENT =

I NSURANCE RETI REM ENT I NVESTMENTS

ANALYST BRIEFING

GUARDIAN HOLDINGS LIMITED

1 GUARDIAN DRIVE

WESTMOORINGS • TRINIDAD


Financial Results – nine months ended 30 September 2015

Analysts’ Briefing

9th November 2015


RAVI TEWARI GROUP CHIEF EXECUTIVE OFFICER


CONSOLIDATED FINANCIAL HIGHLIGHTS

3

Pre tax profit down $14MM, 4.6% mainly due to $93MM unfavourable fair value swing

YTD Sep 2015 $301MM Pre tax profit

YTD Sep 2014 $315MM Pre tax profit

TT$'MM

Nine Months

Sept 15

Nine Months

Sept 14 Var $ Var %

Reported

Profit for the year 236 274 (38) -14%

Non-controlling interests 1 (12) 13 N/A

Profit to equity shareholders 235 286 (51) -18%

Basic EPS $ 1.02 $ 1.23 ($0.21) -17%


LIFE HEALTH AND PENSION

ASSET MANAGEMENT

STRATEGIC ALTERNATIVE INVESTMENTS

GLOC (100%)

GLL (100%)

FATUM LIFE

CURACAO (100%)

FATUM LIFE

ARUBA (100%)

FATUM HEALTH (100%)

RGM (33%)

ECGPC (15%)

LAEVULOSE (100%)

GGTL (100%)

BUSINESS SEGMENTS

4

GAMIS (100%)

PROPERTY & CASUALTY

ROYALSTAR ASSURANCE

(26%)

FATUM GENERAL

GGI (OECS) (54%)

CURACAO (100%)

ARUBA (100%)

TRINIDAD (100%)

BARBADOS (100%)

BOOGAARD GROUP (100%)

GUARDIAN RE

(100%) THOMA & KRUIT (100%)

GGIL (100%)

GGIJL (100%)

GAM MUTUAL FUNDS


• 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 UNITS PRODUCES CONSISTENT RETURNS AND GROWTH

5


MERGERS AND ACQUISITIONS

6

Boogaard Group In February 2015, the Group signed a Share Purchase Agreement for the acquisition of Boogaard Group, a Dutch Caribbean insurance broker (consideration ANG 22MM) Completion expected during Q4/2015


KERRI MAHARAJ GROUP CHIEF FINANCIAL OFFICER

Consolidated Financial Highlights


8

SUMMARY CONSOLIDATED FINANCIALS

Note 1

Note 2

Note 1 +$80MM due to LHP increases (favourable Jamaica releases net of reserve adjustments in both years) and lower P&C (partly due to releases in 2014)

Note 2 -$93MM negative swing in fair values mainly from bonds and overseas equities Note 3 -$19MM lower Investment income

Note 3

TT$'MM

Nine Months

Sept 15

Nine Months

Sept 14 Var $ Var %

Net income from insurance activities 533 453 80 18%

Net fair value (losses)/gains (66) 27 (93) -344%

Net income from other investing activities 593 602 (9) -1%

Net income from all activities 1,060 1,082 (22) -2%

Operating expenses (671) (687) 16 -2%

Finance charges (104) (98) (6) 6%

Share of associate results 16 18 (2) -9%

Profit before tax 301 315 (14) -4%

Taxation & other (67) (56) (12) 21%

Profit from continuing operations 234 259 (25) -10%

Net gain on discontinued operations 2 16 (13) -86%

(Profit)/loss attributable to NCI (1) 12 (13) -109%

Profit to equity shareholders 235 286 (51) -18%


4,007 4,365

4,911 5,011

4,113 3,967

0

1,000

2,000

3,000

4,000

5,000

6,000

2011 2012 2013 2014 YTD Q3/14 YTD Q3/15

GPW ($million)

GROSS PREMIUMS WRITTEN

9

YTD 2015 GPW was affected by two factors:

i. Reported LHP marginally higher +$15MM. Adjusting for the change in accounting treatment for a portfolio of health business (Impact -$60MM), underlying LHP +$75MM, 4%

ii. P&C lower mainly due to international partners and fall in premium rates

8% CAGR


GEOGRAPHIC DISTRIBUTION OF REVENUE

Geographic distribution continues to be stable, with approximately 50% earned in Trinidad and Tobago

10

Excludes realized and unrealized gains


ANAND PASCAL PRESIDENT GUARDIAN LIFE OF THE CARIBBEAN

Life, Health and Pensions (LHP)


LIFE, HEALTH AND PENSIONS (LHP)

12

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


ANNUALIZED PREMIUM INCOME

13

225 207

303 278

195 195

65 68

71 58

39 38

120 123

120

116

117 112

410 398

494 451

351 345

-

100

200

300

400

500

600

2011 2012 2013 2014 YTD Q3/14 YTD Q3/15

Settled API ($million)

GLOC GLL FATUM

Strong Q3 by GLOC

2015 is a Sales Convention qualifying year


1,347 1,427

1,762 1,836

1,437 1,418

552 631

557 490

381 376

403

471

476 496

425 464

2,302

2,529

2,794 2,821

2,243 2,258

-

500

1,000

1,500

2,000

2,500

3,000

2011 2012 2013 2014 YTD Q3/14 YTD Q3/15

GPW ($million)

GLOC GLL FATUM

LHP – GROSS PREMIUMS WRITTEN

14

CAGR 7% GPW showed an increase of 1% vs Q3 2014 mainly due to a change in accounting policy in GLOC in Dec 2014 on Reinsurance portfolio

Excluding that change GLOC showed a 5% growth over 2014


1,589 1,737 2,030 2,154

1,509 1,595

806 925

832 747

569 527

635

751 714 732

581 632

3,029

3,413 3,576 3,633

2,658 2,753

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2011 2012 2013 2014 YTD Q3/14 YTD Q3/15

Revenue ($million)

GLOC GLL FATUM

LHP – REVENUE

15 Excludes 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 4% over Q3 2014


RICHARD ESPINET EXECUTIVE DIRECTOR / GROUP PRESIDENT PROPERTY & CASUALTY

Property & Casualty (P&C)


PROPERTY & CASUALTY (P&C)

17

PROPERTY & CASUALTY

ROYALSTAR ASSURANCE

(26%)

FATUM GENERAL

GGI (OECS) (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 largest and strongest 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 - new broker acquisition in the Dutch Antilles is 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

“A-” Excellent rating reaffirmed by AM Best


1,120 1,267 1,315 1,387

1,217 1,081

287 238

402 431

341 346

228 257

326 297

248 229

70 75

74 75

63 52

1,705 1,837

2,117 2,190

1,870 1,709

-

500

1,000

1,500

2,000

2,500

2011 2012 2013 2014 YTD Q3/14 YTD Q3/15

GGIL FATUM GGIJL GRE

P&C – GROSS PREMIUMS WRITTEN

18

9% CAGR GPW of $1.7Bn 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


COMBINED RATIO - PROPERTY & CASUALTY

19

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 40% (2014: 38%)

Operating expense discipline resulting in an expense ratio of 40% (2014: 41%)

Its distinctive reinsurance strategies


NARISA HOSEIN VICE PRESIDENT – INVESTMENTS

Asset Management (AM)


ASSET MANAGEMENT

21

ASSET MANAGEMENT

GGTL (100%)

GAMIS (100%)

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

GAM MUTUAL FUNDS


ASSETS UNDER MANAGEMENT

22

* 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 Q3/15

(TT$Bn)

6% CAGR Assets under Management show an increase of 3% in 2015.


AM – GAM REVENUE & PROFITS

23

60.0 61.9 60.4 58.9

43.5 44.5

19.7 23.1

20.6 20.7

14.2 13.7

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2011 2012 2013 2014 YTD Q3/14 YTD Q3/15

Revenue & profitability

Revenue ($MM) PAT ($MM)

Revenue for Q3 2015 is marginally higher by 2% from Q3 2014

Profit After Tax for Q3 2015 is marginally lower by 3.5% from Q3 2014


INVESTMENT MIX

24

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


QUESTIONS

25

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