Driving forward key Group Marketing and strategic growth Knowledge Management networking meeting initiatives Results for the year to 31 December 2016 9 March 2017 • 23 November 2016 0
The leading specialist provider of professional services to clients throughout the global insurance market Professional Services 1884 Management Services Established provides end-to-end management of insurance companies and associations 1,800 Employees Adjusting Services provides loss adjusting services across 72 the aviation, energy, marine, property, Offices casualty and special risks sectors 29 Insurance Support Services Countries provides a range of outsourced £169 m professional, technology and support 2016 Revenue services 9/10 Staff recommend CT as O wns and consolidates a great place to work Life international life insurance 100% businesses, which are primarily in Insurance focus run-off Charles Taylor plc 2016 results presentation 9 March 2017 1
We have a robust investment case Strong fundamentals Consistently profitable • Unrivalled breadth of insurance-related professional services • Expert, knowledge of the • Positive prospects Diversified, resilient business insurance market • Reliable revenue and profit • Enormous, worldwide base streams of technical resource, • Solid cashflows • Driving forward four key • Culture of long-term • Well supported dividend strategic initiatives: partnership and service • Build InsureTech capability • Stable, trusted and well- • Grow medical claims and governed assistance • • Track record of innovation Extend outsourced services • Become second syndicate ready • Driving organic growth in the core business • Healthy acquisition, JV and business investment pipeline • Fragmented competition • US$4.8 trillion global market 1 1. Source: BusinessWire, 2 February 2017 We aim to deliver reliable income streams, with sustainable year-on-year growth in earnings, while investing to create opportunities to drive higher future earnings growth in the medium to longer term. 2 Charles Taylor plc 2016 results presentation 9 March 2017
We are a successful, growing business Revenue, £m Adjusted earnings, £m* 14.8 £169 +90% +58% 13.0 143 122 10.m 113 107 8.5 7.8 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 3 Charles Taylor plc 2016 results presentation 9 March 2017
We are delivering organic growth in our existing core businesses 2016 highlights - Grew The Standard Club’s tonnage Key growth themes in core businesses Deliver increased revenues - Developed ‘Acclaim’ claims management system for by growing alongside the The Standard Club Management mutual insurers managed by - Achieved 95% renewal rate and attracted new members to The Strike Club Services Charles Taylor, offering new - Completed successful renewal for Signal with 99% products and services, and retention rate and new members winning new contracts - Enabled SafeShore WC programme to grow - Established Construction & Engineering adjusting service Grow adjusting revenues by - Appointed as a lead adjuster on international sporting Adjusting expanding into new locations construction project Services and expanding the services - Opened Peru office - Appointed Regional Head for the USA offered from each office - Recruited senior adjusters - Recruited InsureTech Latin America sales director - Invested in DUA solutions business and partnered with Generate new revenues by Insurance copy virtualisation business extending our professional - Added functionality to the London Market Experts Support Database services capabilities for global Services - Appointed CTIS finance and operations directors insurance markets - Won systems contracts from insurance brokers - Secured new client wins for TRAX - Agreed to acquire books of life business from Zurich Secure capital releases by International – our fifth life acquisition in five years Life Insurers acquiring and consolidating life - Progressed consolidation of Scottish Widows International and Nordea Life & Pensions into the insurance businesses Group’s wholly owned life business
And driving forward our strategy is to grow through targeted investments – 2016-17 strategic initiatives: Build InsureTech Grow medical Extend outsourced Become second- capability claims/assistance services syndicate ready • • • • Launched Charles Acquired CEGA Group Expanded Charles Established turnkey Taylor InsureTech Q1 Q3 2016 Taylor TPA globally Q2 managing agency in Q1 2015 2016 2015 • Has longstanding • • • Recruited senior Lloyd’s Acquired sizeable stake insurer relationships Agreed to acquire a in Fadata in late 2015 fund administration market staff • Enables medical and business to extend life • • Opened Technology assistance services to Developed systems and servicing Q4 2016 be offered to CT’s Centre of Excellence in operational capability • Utilising CEGA’s volume Latin America clients • Actively marketing for claims handling • • Implementing life policy Significant joint second syndicate capabilities admin system in Peru marketing opportunities Global market US$166bn 1 Global market US$18bn 2 Global market US$190bn 3 Lloyd's capacity £27.7bn 4 1. Source: Gartner 2. Source: Finaccord 3. Source: IBISWorld 4. Source: Insurance Insider We are investing to ensure an unrivalled range of services, outstanding service levels and ongoing innovation for our clients. By doing so aim to deliver attractive long-term returns for our investors 5 Charles Taylor plc 2016 results presentation 9 March 2017
We performed solidly overall in 2016, building on the strong growth achieved in 2015 Charles Taylor Group results 2015 2016 % change 143.4 169.3 18.0 Revenue (£m) 14.2 14.8 4.0 Adjusted PBT (£m) 12.8 10.7 (16.3) Statutory PBT (£m) 13.0 14.8 13.5 Adjusted earnings (£m) 19.98 22.27 11.5 Adjusted EPS (p) 18.61 15.85 (14.9) Statutory EPS (p) 10.00 10.50 5.0 Dividend per share (p) 6 Charles Taylor plc 2016 results presentation 9 March 2017
Our performance demonstrates the strength of our diversified business model Segmental results 2016 (£m) Revenue Operating profit 2015 2016 % change 2015 2016 % change 50.7 8.8 Management 54.7 7.9 8.7 (2.0) 59.0 65.4 10.9 1.7 1.8 7.5 Adjusting Insurance 32.1 47.0 46.4 4.5 3.8 (14.9) Support Unallocated - - n/a 0.2 - n/a 141.9 167.2 17.9 15.2 14.3 (6.0) Professional Services 4.8 0.2 Insurance 4.7 (1.9) 2.0 758.1 Companies Eliminations (3.2) (2.7) n/a - - n/a Group 143.4 169.3 18.0 15.5 16.3 5.5 7
Net debt has returned to normal levels Net debt (£m) Annual average • Following investments in CEGA and Fadata, net debt net debt returned to normal levels At 31 Dec 2014 32.6 24.6 • CEGA Group has additional £5m facility • We are managing the Group’s cash position while At 31 Dec 2015 9.9 5.2 investing for growth At 31 Dec 2016 37.5 12.9 Adjusting WIP Debtors Working Retirement benefit Net of Services working (months) (months) capital obligation (£m) deferred capital (months) tax 4.8 4.0 8.8 At 31 Dec 2014 At 31 Dec 2014 41.5 33.2 At 31 Dec 2015 4.8 4.3 9.1 At 31 Dec 2015 39.6 32.4 At 31 Dec 2016 52.5 43.5 At 31 Dec 2016 4.6 4.5 9.1 • DB deficit rose due to falling bond yields • Adjusting Services’ working capital flat in 2016 and reduced corporate bond spreads • We are focused on managing down Adjusting Services’ • Multi year recovery plans are in place working capital 8 Charles Taylor plc 2016 results presentation 9 March 2017
Outlook 2017 • We are performing in line with the Board’s expectations: – Management Services is performing well and is expanding its services for mutuals – Adjusting Services achieving top line growth while investing in people and offices – Insurance Support Services is capitalising on growth initiatives – Life Insurers is acquiring and consolidating international life companies • We are successfully executing our business strategy for growth – Delivering on four key growth initiatives – Driving forward numerous initiatives to grow the Group’s core businesses • We are executing a targeted strategy to source attractive opportunities for acquisitions, joint ventures and business investments across all business lines We aim to deliver reliable income streams, with sustainable year-on-year growth in earnings, while investing to create opportunities to drive higher future earnings growth in the medium to longer term. 9 Charles Taylor plc 2016 results presentation 9 March 2017
Appendices 10 Charles Taylor plc 2016 results presentation 9 March 2017
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