“ Building for the future ” Annual Shareholders Meeting Year ended 31 December 2011 10 May 2012
“ Building for the future ” Jeffrey Mack Group Chief Executive Officer
2011 Highlights: Environment Characterized by 2 key macro events: • An uncertain business climate caused by the continued weak economic conditions in our 15% region, and in particular, within the Eurozone. 23% 17% Punctuated by historic low interest rates and volatile equity markets. 25% 17% This affected our investing objectives through lower yielding fixed income securities, a higher than desired amount of cash and short term instruments, and below average opportunities for achieving realized gains. • 2011 saw the highest level of worldwide catastrophe related losses in history. US$ 370Bn in economic losses US$ 116Bn in insured losses Our Lloyds of London business, Jubilee, sustained losses of TT$ 210MM driven largely from its worldwide property account. 5/17/2012 3
2011 Highlights: Financial Results Full Year Actual (TT$MM) 2011 2010 Var $ Var % Reported 15% 23% Profit for the Year 246 425 (179) -42% 17% 25% 17% Basic EPS $ 1.13 $ 1.94 ($0.81) -42% Discontinued Net Loss (210) (56) (154) 278% Continuing Profit for the Year 456 481 (25) -5% Basic EPS $ 2.04 $ 2.20 ($0.16) -7% 5/17/2012 4
Segments CARIBBEAN INTERNATIONAL STRATEGIC LIFE HEALTH ASSET PROPERTY & PROPERTY & ALTERNATIVE AND PENSION MANAGEMENT CASUALTY CASUALTY INVESTMENTS GLOC GGIL GUARDIAN RE GAM RGM (100%) (100%) (100%) (100%) (33.33%) JUBILEE GLL WIA SERVUS GAMJA (39.1%) (100%) (100%) (50%) (100%) Sold Aug 11 Sold Jul 10 FATUM LIFE FATUM GENERAL ZENITH ECGPC CURACAO CURACAO (100%) (15%) (100%) (100%) Sold Dec 09 FATUM LIFE FATUM GENERAL LAEVULOSE ARUBA ARUBA (79%) (100%) (100%) FATUM TNI HEALTH (54%) (100%) RSA (25%) 5
Discontinued operations After our (2010) reported strategic review of our Lloyd’s business: • The Group sold Jubilee Group Holdings Ltd (JGHL)to Ryan Specialty Group (RSG) in Q3 2011 15% • Reported a $74MM profit on sale of shares of JGHL 23% 17% • Ceased underwriting at Lloyd’s at the end of Q3 25% 17% • RSG took over management of Jubilee Managing Agency, including oversight of the prior years’ business • RSG took a much more aggressive position on loss reserves, well in excess of GHL’s own technical estimates • GHL required to book to enhanced estimates in Q4 - $210MM (as at Q3 losses were $67MM) • Business segment accounted for as “discontinued” • GHL is satisfied that it has for all intents and purposes subsumed future material movement • Any improvement from this level of loss reserves will flow to the GHL’s “bottom line” 5/17/2012 6
Profit attributable to equity holders Profit attributable to equity holders ($millions) CAGR 14.5% 600 400 461 471 200 406 365 261 - 2009 2010 2011 (200) (400) (827) (600) Reported (800) Continuing operations (1,000) Continuing operations are delivering stable consistent growth 5/17/2012 7
Earnings per share EPS (continuing operations) $2.50 235 231.1 230 $2.20 $2.00 225 $2.14 $2.04 $1.98 220 $1.81 $1.75 $1.50 215 209.3 210 $1.00 205 201.8 200 $0.50 195 190 $- 185 2009 2010 2011 Basic Diluted Weighted Average Shares EPS from continuing operations reflects the positive performance 8 5/17/2012
Dividends per share Dividends per share $0.60 $0.52 $0.52 $0.50 $0.50 $0.44 $0.40 $0.30 $0.30 $0.20 $0.10 $0.00 2007 2008 2009 2010 2011 Dividend per share reflects pattern of growth from our core operations * - excludes $0.25 special dividend paid in 2008 5/17/2012 9
Achievements 2011 Achievements Designated the Caribbean Company of the Decade by World Finance Magazine Guardian Life of the Caribbean named Company of the Year by World Finance Magazine An unprecedented fours years in a row The Jamaica Stock Exchange awarded Guardian Life Limited the award for best website 5/17/2012 10
Strategic Priorities Creating shareholder value through delivering stable and growing earnings 15% 23% 17% Increasing revenue organically, while maintaining our disciplined 25% 17% underwriting Inorganic revenue and accretive earnings growth Best in region Risk Management and Corporate Governance framework 5/17/2012 11
“ Building for the future ” Kerri Maharaj Group Chief Financial Officer 5/17/2012
Consolidated financial highlights 2011 Full Year Actual (TT$MM) 2011 2010 Change Net result from insurance activities 360 261 37.9% Net income from investment activities 1,056 1,159 -8.9% Net income from all activities 1,416 1,420 -0.3% Operating expenses (729) (728) 0.1% Finance charges (110) (83) 32.8% Operating profit 577 609 -5.3% Profit from continuing operations 456 481 -5.2% Excellent core results despite challenging environment 5/17/2012 13
Geographic distribution of net income from all activities 2010 - $1.42 billion 2011 - $1.42 billion 0.1 , 10% (0.0), -1% 23% 17% 0.3 , 19% 25% 17% 0.3 , 18% 0.6 , 46% 0.8 , 57% 0.3 , 23% 0.4 , 26% Trinidad & other Caribbean Trinidad & other Caribbean Jamaica Jamaica Netherland Antilles Netherland Antilles International P&C International P&C IPC unfavorably affected in 2010 by hurricane Tomas and Chilean earthquake 5/17/2012 14
Balance sheet composition Consolidated Balance Sheet ($billions) 25.0 21.7 21.5 21.0 19.4 15% 20.0 18.3 17.9 23% 17% 15.0 25% 17% 10.0 5.0 3.2 3.1 2.3 - 2009 2010 2011 Total assets Total liabilities Net equity High quality assets: intangibles less than $0.3Bn each year Consistent equity growth 5/17/2012 15
Consolidated Investment mix 2010 2011 7% 8% 11% 13% 7% 9% 8% 0% 8% 0% 49% 49% 18% 13% Investment properties Investment properties Government securities Government securities Debentures & Corporate bonds Debentures & Corporate bonds Other Other Equities Equities Term Deposits Term Deposits Cash & Cash equivalents Cash & Cash equivalents Stable investment profile in line with Group strategy 5/17/2012 16
Gearing ratio Debt-Equity 0.90 0.80 0.84 0.70 0.60 0.50 0.40 0.40 0.37 0.30 0.20 0.10 - 2009 2010 2011 Leverage ratio is carefully managed 5/17/2012 17
Life Health and Pensions (LHP) 5/17/2012 18
Life Health & Pension • Leading market shares: LIFE HEALTH AND PENSION – # 1 In Trinidad • Over 600 dedicated life sales agents GLOC • GLOC carries an “A - ” Excellent rating (100%) by AM Best GLL (100%) – # 2 In Jamaica FATUM LIFE • Over 300 dedicated life sales agents CURACAO (100%) FATUM LIFE – Fatum has approximately 50% of the Dutch ARUBA Caribbean market (100%) • Sales primarily broker-driven FATUM HEALTH (100%) 19
LHP – Financial Highlights 2011 Annualised Premium Income Profits ($million) ($million) 250 320 2010 -$376MM 300 200 2011 -$410MM 280 150 323 225 260 303 190 100 240 120 120 50 220 66 65 200 - 2010 2011 GLOC FATUM GLL 5/17/2012 20
Caribbean Property and Casualty (CPC) 5/17/2012 21
Property & Casualty CARIBBEAN Largest Caribbean property & casualty insurer PROPERTY & ◦ Double the size of its nearest competitor measured by CASUALTY gross premiums written ◦ Underwrites in every English speaking Commonwealth GGIL (100%) country in the Caribbean Financial strength and consistently applied WIA (100%) underwriting discipline are competitive advantages ◦ GGIL carries an “A - ” Excellent rating by AM Best FATUM GENERAL ◦ Consistently delivers high profit margins CURACAO (100%) Manages the underwriting cycles Good geographic spread FATUM GENERAL ARUBA Excellent reinsurance program (100%) TNI (54%) RSA (25%) 22
CPC – Financial highlights 2011 GPW ($million) Combined ratio Profits ($million) (caribbean operations) 1,600 100.0% 160 2010 -$1.3Bn 1,400 140 -$1.6Bn 2011 1,200 120 90.0% 1,000 100 146 80 800 1,347 80.0% 115 60 1,009 600 40 400 70.0% 20 287 263 200 - - 60.0% 2010 2011 2007 2008 2009 2010 2011 GGIL FATUM 5/17/2012 23
Asset Management (AM) 5/17/2012 24
Asset Management Acts as investment manager for the ASSET group MANAGEMENT Offers investment opportunities to 13 GAM (100%) independent mutual funds Offers financial advisory services to high net worth individuals Total Assets Under Management $8.2Bn Consistently profitable 25
AM – Financial highlights 2011 Profits ($million) AUM ($billion) CAGR 10% 20 9.0 8.0 8.2 18 7.0 7.4 6.9 6.0 6.2 16 5.0 20 4.0 18 14 3.0 2.0 12 1.0 - 10 2008 2009 2010 2011 2010 2011 5/17/2012 26
15% 23% 17% Thank You 25% 17% 5/17/2012 27
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