Analysts’ Briefing - Guardian Groupmyguardiangroup.com/uploads/presentations/Brokers... · GROUP...

++ INVESTMENTINSURANCE RETIREMENT =

I NSURANCE RETI REM ENT I NVESTMENTS

ANALYST BRIEFING

GUARDIAN HOLDINGS LIMITED

1 GUARDIAN DRIVE

WESTMOORINGS • TRINIDAD


Financial Results – Half year ended 30 June 2015

Analysts’ Briefing

31 July 2015


RAVI TEWARIGROUP CHIEF EXECUTIVE OFFICER


CONSOLIDATED FINANCIAL HIGHLIGHTS

3

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%


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

4

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%)


• 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

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

Final approval from the respective Central Banks is expected shortly (Consideration ANG 22MM)


POINTE SIMON ON COMMERCIALLY VIABLE FOOTING

7

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


SYSTEMATIC DEPLOYMENT OF STRATEGY

8

Drive strong organic sales

Growth by acquisition

Operational efficiency

Build scalable, centralized group infrastructure


KERRI MAHARAJGROUP CHIEF FINANCIAL OFFICER

Consolidated Financial Highlights


10

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%


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

11

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


GEOGRAPHIC DISTRIBUTION OF REVENUE

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

12

Excludes realized and unrealized gains


ANAND PASCALPRESIDENT GUARDIAN LIFE OF THE CARIBBEAN

Life, Health and Pensions (LHP)


LIFE, HEALTH AND PENSIONS (LHP)

14

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

15

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


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

16

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


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


RICHARD ESPINETEXECUTIVE DIRECTOR / GROUP PRESIDENT PROPERTY & CASUALTY

Property & Casualty (P&C)


PROPERTY & CASUALTY (P&C)

19

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


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

20

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


COMBINED RATIO -PROPERTY & CASUALTY

21

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


BRENT FORDGROUP CHIEF INVESTMENT OFFICER / GROUP PRESIDENT ASSET MANAGEMENT

Asset Management (AM)


ASSET MANAGEMENT

23

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


ASSETS UNDER MANAGEMENT

24

* 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.


AM – GAM REVENUE & PROFITS

25

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


INVESTMENT MIX

26

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

27

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