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INSUR ANCE RET IREMENT INVEST MENT S
ANALYST BRIEFING
GUARDIAN HOLDINGS LIMITED
1 GUARDIAN DRIVE
WESTMOORINGS • TRINIDAD
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Financial Results – Year Ended 31st December 2018
Analyst Briefing
8 March 2019
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RAVI TEWARIGROUP CHIEF EXECUTIVE OFFICER
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3
CONSOLIDATED FINANCIAL HIGHLIGHTS
FY 2018$705MM
FY 2017$520MM
$184MM,35%
Profit Before Tax
Profit attributable to equity shareholders increased $127MM, 31% over the prior period owing primarily to higher Net results from insurance activities, partially offset by a decline in Net realised and unrealised gains. This reduction of -$224MM were principally due to short-term price fluctuation on the Group’s equity portfolios.
The Group also experienced higher operating expenses arising out of a number of initiatives targeted to either a moderate level of increase revenue growth or reduce the operating cost in the future.
TT$'MM 2018 2017 Var $ Var %
Reported
Profit attributed to equity holders of the parent 534 407 127 31%
Basic EPS $2.30 $ 1.75 $0.55 31%
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Consolidated Financial Highlights
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5
SUMMARY CONSOLIDATED FINANCIALS
Note 2
Note 1
LHP increased $362MM mainly from organic growth initiatives and improved renewals
P&C increased $98MM as it was spared major catastrophic events compared to 2017
Note 2 Substantially due to the decline of global equity markets in 2018
Note 3Mainly higher investment income
Note 1
Note 3
TT$'MM 2018 2017 Var $ Var %
Net income from insurance activities 863 403 460 114%
Net realised and unrealised gains 36 260 (224) -86%
Net income from other investing activities 946 931 15 2%
Net income from brokerage activities 25 17 8 45%
Net income from all activities 1,870 1,611 259 16%
Net impairment losses on financial assets (1) (6) 5 83%
Operating expenses (1,046) (975) (71) -7%
Finance charges (136) (129) (7) -5%
Share of associate results 17 19 (2) -8%
Profit before tax 705 520 184 35%
Taxation & other (169) (111) (58) -53%
Profit for the year 535 410 126 31%
Profit attributable to NCI (1) (3) 2 67%
Profit attributable to equity holders of the parent 534 407 128 31%
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6
SUMMARY CONSOLIDATED FINANCIALS
Note 5
Note 4Mainly higher commission from Thoma RAB portfolio
Note 5Net impairment losses on financial assets of -$1MM 2018 (under IFRS 9) compared to -$6MM in 2017 (under IAS 39)
Note 6Mainly driven by Group wide strategic initiatives
Note 4
Note 6
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5,011 5,152
5,475 5,473
5,861
4,400
4,600
4,800
5,000
5,200
5,400
5,600
5,800
6,000
2014 2015 2016 2017 2018
$MM
4% CAGR
7
GPW increased $389MM, 7% over 2017:
LHP: $223MM, 7% (mainly organic growth and higher renewal premiums)
P&C: $166MM, 8% (mainly from growth of Property line and international partners)
GROSS PREMIUMS WRITTEN
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Geographic distribution of revenue remained relatively constant, with approximately 50% earned in Trinidad & other Caribbean
8
GEOGRAPHIC DISTRIBUTION OF REVENUE
Excludes realized and unrealized gains
2.82 , 53%
0.99 , 19%
1.41 , 26%
0.11 , 2%
2017 - $5.3 billion
3.02 , 54%
1.08 , 19%
1.39 , 25%
0.13 , 2%
2018 - $5.6 billion
Trinidad & other Caribbean Jamaica Dutch Caribbean Non Caribbean
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ANAND PASCALPRESIDENT GUARDIAN LIFE OF THE CARIBBEAN
Life, Health and Pensions (LHP)
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LIFE, HEALTH AND PENSION
GLOC(100%)
GLL(100%)
FATUMCURACAO
(100%)
FATUMARUBA(100%)
FATUM HEALTH(100%)
The leading life insurer in the Caribbean:
# 1 in Trinidad
700+ dedicated life sales agents
GLOC AM Best A- Excellent rating
# 2 in Jamaica
250+ dedicated life sales agents
Fatum has approximately 50% of the Dutch Caribbean market
Sales primarily broker-driven
100+ dedicated life sales agents
GL OECS(100%)
10
LIFE, HEALTH AND PENSIONS
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278 301 305 299 283
58 59 58 68
70
20 22 21 30 38
356 382 384
397 391
-
50
100
150
200
250
300
350
400
450
2014 2015 2016 2017 2018
GLOC GLL FATUM
11
Slight decline from 2018 – 2%
Driven by a 5% decline in GLOC. Mainly from slower activity in 1st Half 2018. Strong end to 2018 hitting 95% of Q4 targets
Growth in FATUM and GLL. FATUM agency strategy working well. API almost doubled from 2016
$MM
ANNUALIZED PREMIUM INCOME
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1,836 1,983 2,356
2,062 2,249
490 498
544
616 679 496
542
558 663
636 2,822
3,023
3,458 3,341
3,564
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2014 2015 2016 2017 2018
$MM
GLOC GLL FATUM
6% CAGR
LHP – GROSS PREMIUMS WRITTEN
12
GPW increased $223MM or 7%
Mainly due to strong growth in T&T and Jamaica
This is result of persistency improvements in both territories
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LHP – REVENUE
13
Total Revenue increased 5% compared to 2017
Growth mainly from premium revenue
Investment income grew at a slower rate mainly due to lower reinvestment in long term issues in T&T 2,005 2,111
2,607 2,347 2,525
728 703
764 821
887 722
806
819 909
870 3,455
3,620
4,190 4,077
4,282
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2014 Restated 2015 2016 2017 2018
$MM
GLOC GLL FATUM
6% CAGR
Excludes realized and unrealized gains/losses
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DEAN ROMANY
Property & Casualty (P&C)
PRESIDENT GUARDIAN GENERAL INSURANCE LIMITED
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PROPERTY & CASUALTY
15
PROPERTY & CASUALTY
ROYALSTARASSURANCE
(26%)
FATUM GENERAL
GGI (OECS)(59%)
CURACAO(100%)
ARUBA(100%)
TRINIDAD(100%)
BARBADOS(100%)
BOOGAARD GROUP(100%)
GUARDIAN RE
(100%)THOMA(100%)
GGIL(100%)
GGIJL(100%)
An established and distinguished P&C 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; and overall Caribbean
Boogaard (brokerage) in the Dutch Antilles provides additional sources of fee income (together with Thoma)
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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P&C – GROSS PREMIUMS WRITTEN
16
GPW grew 8% over 2017 as premium rates hardened regionally and internationally
Growth mainly due to higher premiums and policies in Property across all territories and Motor in specific jurisdictions
1,387 1,316 1,072 1,076 1,191
431 457
534 605 686
297 294 353
388
370
75 62
58 63
51 2,190 2,129 2,017 2,132 2,298
-
500
1,000
1,500
2,000
2,500
2014 2015 2016 2017 2018
$MM
GGIL FATUM GGIJL GRE
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COMBINED RATIO – PROPERTY & CASUALTY
17
Improved Combined Ratio reflecting P&C’s:
Strong technical underwriting discipline: 2018 net claims ratio of 43% (2017: 54%)
Distinctive reinsurance strategies
87.7%
85.1%
82.8%
90.9%
98.8%
87.7%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
2013 2014 2015 2016 2017 2018
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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
GGTL(100%)
GAMISL(100%)
GAM MUTUAL FUNDS
Lines of business
Registered with CBTT & TTSEC – offers Trust Services, Loans, Accounting & Administration Services
Investment Banking Business Line being developed
Registered with TTSEC - investment adviser, broker-dealer, underwriter
Manages mutual funds, private wealth, captive portfolios
Trades for Non-Discretionary Accounts
Offers 13 independent mutual funds covering all asset classes; AUM TT$1Bn
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ASSETS UNDER MANAGEMENT
20
AUM in 2018 increased by 5% driven by mainly by Private Wealth and Captive Business
9.7 10.4
11.6
12.8 13.4
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2014 2015 2016 2017 2018
$Bn
8% CAGR
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AM – GAM REVENUE & AUM MIX
21
31%
44%
24%
Captive Third Party Proprietary
Revenue Mix
79%
21%
Captive Third Party
AUM Mix
Third Party Business contributed the largest portion to revenue and represents 21% of AUM
Fees charged to Mutual Funds are included in Third Party above
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AM – GAM REVENUE & PROFITS
58.9 59.5
74.3 79.8
89.5
20.7 19.0
25.5 25.5 29.0
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2014 2015 2016 2017 2018
$MM
Revenue ($MM) PAT ($MM)
22
Revenue for 2018 was 12% higher than prior year
Profit after tax for 2018 was higher by 14% compared to 2017
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INVESTMENT MIX
$1.5 , 7%
$9.4 , 46%
$2.4 , 12%
$3.1 , 15%
$2.0 , 10%
$2.1 , 10%
December 2018 - $20.5 billion
Investment properties Government securities Debentures & Corporate bonds
Equities Term Deposits Cash & Cash equivalents
Excludes Investment securities, cash and cash equivalents of mutual fund unit holders
$1.5 , 7%
$9.3 , 47%
$2.4 , 12%
$3.0 , 15%
$1.8 , 9%
$2.1 , 10%
December 2017 - $20.1 billion
23
Asset mix fairly steady from year end 2017
We continue to focus on shifting into more productive long-term investments
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QUESTIONS
24