Analyst Briefing Financial results for the quarter ended 31 March 2012 8-May-12
Jeffrey Mack Group Chief Executive Officer
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%) GLL WIA SERVUS (100%) (100%) (50%) FATUM LIFE FATUM GENERAL ECGPC CURACAO CURACAO (15%) (100%) (100%) FATUM LIFE FATUM GENERAL LAEVULOSE ARUBA ARUBA (79%) (100%) (100%) FATUM TNI HEALTH (54%) (100%) RSA (25%) 3
Consolidated Financial Highlights – Q1 2012 Q1-12 Q1-11 (TT$MM) (TT$MM) Var $ Var % Reported Profit for the year 97 89 8 9% Basic EPS $ 0.42 $ 0.38 $0.04 11% Discontinued Net (loss) / gain (1) 1 (2) +100% Continuing Profit for the year 98 88 10 11% Basic EPS $ 0.42 $ 0.38 $0.04 11%
Consolidated Financial Highlights – Q1 2012 Q1-12 Q1-11 (TT$MM) (TT$MM) Var % Net income from insurance activities 86 48 79% Net income from investment activities 242 232 4% Net income from all activities 328 280 17% Operating profit before interest and tax 152 129 18% Finance charges (27) (25) 8% Taxation (26) (18) 44% Profit from continuing operations 98 88 11%
Kerri Maharaj Group Chief Financial Officer
Four Year History Reported profit attributable to equity holders of the parent ($millions) 600 400 200 406 261 88 97 - 2009 2010 2011 Q1-2011 Q1-2012 (200) (400) (827) (600) (800) (1,000) Reported results are impacted by material strategic decisions. Underlying results are not immediately apparent.
Four Year History Profit attributable to equity holders of the parent – continuing operations ($millions) 500 450 400 350 300 250 471 461 200 355 150 100 50 98 87 - 2009 2010 2011 Q1-2011 Q1-2012 A clearer picture emerges when continuing operations are isolated i.e. stable, consistent pattern of growth Excludes Zenith & Lloyds
Earnings Per Share EPS (continuing operations) $2.50 $2.20 $2.00 $2.14 $2.04 $1.98 $1.76 $1.70 $1.50 $1.00 $0.50 $0.42 $0.38 $0.40 $0.37 $0.00 2009 2010 2011 Q1-2011 Q1-2012 Basic Diluted EPS from continuing operations reflects the positive performance.
Four Year History Gross Premiums Written - GPW ($millions) 4,500 4,000 3,500 3,000 2,500 2,000 4,007 3,567 3,285 1,500 1,000 1,356 1,374 500 - 2009 2010 2011 Q1-2011 Q1-2012 Consistent growth despite soft economic conditions in our markets Net Premiums Written show same trend
Geographic Distribution of Revenue Q1-2011 - $1.05 billion Q1-2012 - $1.1 billion 0.03 , 3% 0.04 , 4% Trinidad & other Trinidad & other Caribbean Caribbean 0.31 , 29% Jamaica Jamaica 0.30 , 27% 0.49 , 47% 0.54 , 49% Netherland Netherland Antilles Antilles Non Caribbean Non Caribbean 0.23 , 21% 0.21 , 20% Geographic distribution continues to be stable, with approximately 50% earned in Trinidad and Tobago Excludes realised and unrealised gains/losses
Balance sheet composition Consolidated Balance Sheet ($billion) 25.0 22.2 21.5 21.7 21.0 19.4 20.0 18.9 18.3 17.9 15.0 10.0 5.0 3.28 3.13 3.19 2.34 - 2009 2010 2011 Q1-2012 Total assets Total liabilities Net equity High quality assets: intangibles less than $0.3Bn each year Consistent equity growth
Segment Information
Life Health and Pensions (LHP) Anand Pascal
Life Health & Pension • Leading market shares: LIFE HEALTH AND PENSION – # 1 In Trinidad • Over 600 dedicated life sales agents GLOC • GLOC carries an “A - ” Excellent rating (100%) by AM Best GLL (100%) – # 2 In Jamaica FATUM LIFE • Over 300 dedicated life sales agents CURACAO (100%) FATUM LIFE – Fatum has approximately 50% of the Dutch ARUBA Caribbean market (100%) • Sales primarily broker-driven FATUM HEALTH (100%) 15
LHP – Annualised Premium Income (API) Settled API ($million) 350 300 62 65 250 66 200 150 230 225 100 190 17 50 15 51 40 0 2009 2010 2011 Q1-2011 Q1-2012 GLOC GLL Settled API is up 27.5% due to both sales of protection and savings business during Q1 Settled API shows modest growth in GLL
LHP – Gross Premiums Written (GPW) Gross Premiums Written ($million) 2,500 403 455 2,000 372 552 1,500 540 452 1,000 1,347 1,246 272 1,193 271 500 142 133 312 341 0 2009 2010 2011 Q1-2011 Q1-2012 GLOC GLL FATUM GPW shows steady growth in all territories as new business from current and prior periods remain on the books
LHP – Revenue Revenue ($million) 3,500 3,000 631 659 2,500 572 2,000 806 807 762 1,500 1,000 1,600 1,497 262 1,438 253 500 209 193 388 357 0 2009 2010 2011 Q1-2011 Q1-2012 GLOC GLL FATUM Revenue growth driven primarily by gross premium written Investment income continues to be affected by low interest rate environment in Trinidad and falling rates in GLL Excludes realised and unrealised gains/losses
Caribbean Property & Casualty (CPC) Richard Espinet
Caribbean Property & Casualty CARIBBEAN Largest Caribbean property & casualty insurer PROPERTY & ◦ Double the size of its nearest competitor measured by CASUALTY gross written premium ◦ 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%) 20
CPC – Gross Premiums Written Gross Premiums Written ($million) 1,800 1,600 287 1,400 1,200 263 243 1,000 800 1,347 600 103 143 1,009 964 400 500 475 200 0 2009 2010 2011 Q1-2011 Q1-2012 GGIL FATUM GPW fell in FATUM owing to a continued focus on delivering bottom line profits instead of chasing low-rated business in a competitive market Reduction was somewhat offset by 5.3% growth in premiums written by GGIL through our global network partners
CPC – Combined Ratio Combined Ratio (Caribbean operations) 100% 90% 80% 70% 60% 50% 2007 2008 2009 2010 2011 Q1-2012 The combined ratio for the Caribbean P&C has been consistently below 100%, reflecting the Group’s strong technical underwriting policies and excellent reinsurance protection
Asset Management (AM) Brent Ford
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 $8.4Bn Consistently profitable 24
AM – Assets under management (AUM) AUM - $billion 9.0 8.0 8.4 8.2 7.0 7.4 6.9 6.0 5.0 4.0 3.0 2.0 1.0 - 2009 2010 2011 Q1-2012 AUM increased to $8.4B or 2% from year end 2011 and 4% from comparative period of March 2011 Non-discretionary business line introduced in 2011 contributed to YOY increase
AM – Revenue & Profits 60.0 57.0 50.0 50.0 40.0 35.0 30.0 20.0 19.7 18.1 10.0 12.9 11.6 11.2 4.4 3.3 - 2009 2010 2011 Q1-2011 Q1-2012 Revenue ($M) PAT ($M) Revenues and PAT are slightly down from prior year, mainly due to lower unrealised gains and investment income in a soft interest rate environment Conservative approach to investment given volatile markets and uncertainty
Consolidated Investment mix 2011 Q1-2012 Investment Investment properties properties 8% 8% 13% 14% Government Government securities securities 9% 8% Debentures & Debentures & Corporate bonds Corporate bonds 8% 8% Other Other 0% 0% 49% 49% Equities 13% 13% Equities Term Deposits Term Deposits Cash & Cash equivalents Cash & Cash equivalents Stable investment strategy
QUESTIONS
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