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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 – nine months ended 30 September 2015
Analysts’ Briefing
9th November 2015
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RAVI TEWARI GROUP CHIEF EXECUTIVE OFFICER
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CONSOLIDATED FINANCIAL HIGHLIGHTS
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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%
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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
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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
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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 UNITS PRODUCES 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 (consideration ANG 22MM) Completion expected during Q4/2015
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KERRI MAHARAJ GROUP CHIEF FINANCIAL OFFICER
Consolidated Financial Highlights
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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%
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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
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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 +$75MM, 4%
ii. P&C lower mainly due to international partners and fall in premium rates
8% CAGR
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GEOGRAPHIC DISTRIBUTION OF REVENUE
Geographic distribution continues to be stable, with approximately 50% earned in Trinidad and Tobago
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Excludes realized and unrealized gains
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ANAND PASCAL PRESIDENT GUARDIAN LIFE OF THE CARIBBEAN
Life, Health and Pensions (LHP)
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LIFE, HEALTH AND PENSIONS (LHP)
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LIFE, HEALTH AND PENSION
GLOC (100%)
GLL (100%)
FATUM LIFE
CURACAO (100%)
FATUM LIFE
ARUBA (100%)
FATUM HEALTH (100%)
The leading life insurer in the Caribbean:
# 1 In Trinidad
Over 600 dedicated life sales agents GLOC AM Best A- Excellent rating
# 2 In Jamaica
Over 300 dedicated life sales agents
Fatum has approximately 50% of the Dutch Caribbean market Sales primarily broker-driven
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ANNUALIZED PREMIUM INCOME
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225 207
303 278
195 195
65 68
71 58
39 38
120 123
120
116
117 112
410 398
494 451
351 345
-
100
200
300
400
500
600
2011 2012 2013 2014 YTD Q3/14 YTD Q3/15
Settled API ($million)
GLOC GLL FATUM
Strong Q3 by GLOC
2015 is a Sales Convention qualifying year
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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 ($million)
GLOC GLL FATUM
LHP – GROSS PREMIUMS WRITTEN
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CAGR 7% GPW showed an increase of 1% vs Q3 2014 mainly due to a change in accounting policy in GLOC in Dec 2014 on Reinsurance portfolio
Excluding that change GLOC showed a 5% growth over 2014
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1,589 1,737 2,030 2,154
1,509 1,595
806 925
832 747
569 527
635
751 714 732
581 632
3,029
3,413 3,576 3,633
2,658 2,753
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2011 2012 2013 2014 YTD Q3/14 YTD Q3/15
Revenue ($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
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RICHARD ESPINET EXECUTIVE DIRECTOR / GROUP PRESIDENT PROPERTY & CASUALTY
Property & Casualty (P&C)
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PROPERTY & CASUALTY (P&C)
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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
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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
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9% CAGR GPW of $1.7Bn decreased when compared to the previous period mainly as a result of: premium reductions
on multinational accounts obtained through our global network partners
the fall in premium
rates regionally and internationally
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COMBINED RATIO - PROPERTY & CASUALTY
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The Combined Ratio of 80% continues to be consistently below 90% over the last 5 years, reflecting the P&C Group successfully combining:
Strong technical underwriting discipline resulting in a strong net claims ratio of 40% (2014: 38%)
Operating expense discipline resulting in an expense ratio of 40% (2014: 41%)
Its distinctive reinsurance strategies
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NARISA HOSEIN VICE PRESIDENT – INVESTMENTS
Asset Management (AM)
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ASSET MANAGEMENT
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ASSET MANAGEMENT
GGTL (100%)
GAMIS (100%)
Acts as investment manager for the group
Offers investment opportunities to retail and institutional market
13 independent mutual funds – covering all asset classes Financial advisory services to high net worth individuals –
Discretionary Private Wealth Service Non-Discretionary Trading Accounts – client directed trades
Effective July 1, 2015, GAM was reorganized as follows:
Guardian Group Trust Limited – (CBTT & SEC) will perform trust services and non-bank finance activities
Guardian Asset Management & Investment Services Limited –
(SEC) will perform roles as investment adviser, broker-dealer and underwriter
GAM MUTUAL FUNDS
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ASSETS UNDER MANAGEMENT
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* GAM plus GAM Mutual Funds
8.2
8.9 9.3
9.7 10.0
-
2.0
4.0
6.0
8.0
10.0
12.0
2011 2012 2013 2014 YTD Q3/15
(TT$Bn)
6% CAGR Assets 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
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
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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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