30 September 2011 Jeff Mack [10-Nov-11] Operating segment - PowerPoint PPT Presentation

Financial results for the nine months ended 30 September 2011 Jeff Mack [10-Nov-11]

Operating segment structure 2 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%) JGHL GLL WIA SERVUS (39.1%) (100%) (100%) (50%) Sold Aug 11 FATUM LIFE FATUM GENERAL ECGPC CURACAO CURACAO (40.5%) (100%) (100%) FATUM LIFE FATUM GENERAL LAEVULOSE ARUBA ARUBA (79%) (100%) (100%) FATUM TNI HEALTH (54%) (100%) RSA (25%)

Consolidated financial highlights - 2011 Consolidated financial highlights 2011 2010 Change Gross premiums written 3,679,200 3,472,371 6.0% Net premiums written 2,732,728 2,816,062 -3.0% Net income from insurance activities 206,010 137,329 50.0% Net income from investing activities 784,264 832,374 -5.8% Net income from all activities 990,274 969,703 2.1% Operating expenses (556,295) (550,304) 1.1% Finance charges (72,522) (68,055) 6.6% Operating profit 361,457 351,344 2.9% Share of (loss)/profit of associated companies (33,028) 12,011 -375.0% Profit attributable to equity holders of the parent 242,337 190,223 27.4% Earnings per share $ 1.05 $ 0.93 12.9%

Three year history Gross Premiums Written - GPW ($millions) 5,000 4,500 4,000 3,500 3,000 2,500 4,324 4,203 2,000 3,936 3,679 3,472 1,500 1,000 500 - 2008 2009 2010 Q3-2010 Q3-2011 New strategies and initiatives have more that offset disposal of our Lloyds of London business – Jubilee • Alliance with large Global Partners • Expansion into the Netherlands through our Dutch Caribbean company, FATUM

Three year history Net Premiums Written - NPW ($millions) 4,000 3,500 3,000 2,500 2,000 3,578 3,479 3,180 1,500 2,816 2,733 1,000 500 - 2008 2009 2010 Q3-2010 Q3-2011 Excluding NPW from Lloyds, GHL’s NPW increased 5%; $2.3billion versus $2.2 billion

Geographic distribution of revenue Q3-2010 - $3.96 billion Q3-2011 - $3.58 billion Trinidad & other Trinidad & other 0.6 , 18% 0.8 , 21% Caribbean Caribbean Jamaica Jamaica 1.6 , 45% 1.8 , 46% 0.7 , 19% Netherland Netherland 0.7 , 17% Antilles Antilles Non Caribbean Non Caribbean 0.7 , 18% 0.6 , 16% • The Group’s revenue base remains well balanced with approximately 45% of revenues derived from T&T • Non Caribbean will drop following divestment in Lloyds • GHL no longer owns any business in the UK

Three year history (before operating expenses and finance charges) Net Income ($millions) 1,600 1,400 1,200 1,000 1,175 800 1,041 600 784 478 832 400 200 308 252 230 206 137 0 2008 2009 2010 Q3-2010 Q3-2011 Insurance Activities Investing Activities • Despite soft market conditions, net income from underwriting activities increased 50% due to continued disciplined underwriting and control of catastrophe exposures • Net income from investing activities dropped 6% attributable to low interest rate environment

Three year history Finance costs ($millions) 160 140 120 100 80 135 60 108 83 40 73 68 20 - 2008 2009 2010 Q3-2010 Q3-2011 Finance costs increased by 7% compared with Q3-10; the increase arises because of the overlap of the $300 million bond repaid in April 2011 and the $1 billion Bond which was raised in January 2011.

Three year history Operating profit ($millions) 600 500 400 300 551 465 200 361 351 100 - 2008 2009 2010 Q3-2010 Q3-2011 (100) (178) (200) (300) Excellent underwriting result, coupled with strong expense management overcame a weak investment climate

Three year history Profit attributable to equity holders of the parent ($millions ) 600 400 406 200 242 190 154 - 2008 2009 2010 Q3-2010 Q3-2011 (200) (400) (600) (827) (800) (1,000) • Profit after tax increased 27% • Without one-time, non-recurrent write down of a Jamaican investment and our share of loss suffered by the parent of Jubilee (total -$48million ), PAT would have been $290 million; a 53% increase.

Earnings per share EPS (continuing operations) $2.50 $2.00 $1.92 $1.81 $1.87 $1.75 $1.50 $1.00 $1.05 $0.96 $1.02 $0.93 $0.50 $0.00 -$0.26 -$0.27 2008 2009 2010 Q3-2010 Q3-2011 -$0.50 Basic Diluted • Basic EPS increased by 13% year on year • EPS now fully reflects the shares issued to the IFC • Total shares outstanding currently 231 million as compared to 205 million at Q3-2010

Jubilee investment • Purchased for $89 million (£6.97mm) in 2003 • Originally a motor only syndicate, GHL supported Jubilee’s expansion into international and specialty property business, as well as life • £31.9 million underwriting capital provided as at Sept 2011 • Inception to date profit after tax of $141 million • From sale of shares GHL received $117.8 million in cash • Added $0.31 per share to 2011 ’s EPS • Depending on ultimate underwriting results GHL will receive its underwriting capital back over the next four years • GHL believes that recorded loss reserves are properly established

Balance sheet composition Consolidated Balance Sheet ($million) 25,000 22,035 21,710 21,853 20,988 21,422 19,368 19,012 20,000 18,450 18,599 17,857 15,000 10,000 5,000 3,023 3,130 2,972 3,253 2,342 - 2008 2009 2010 Q3-2010 Q3-2011 Total assets Total liabilities Net equity The group continues to deliver consistent earnings with net equity growing over 9% year on year

Consolidated total assets Total assets ($million) 22,000 254 644 270 253 21,000 253 20,000 21,599 21,391 21,440 21,170 19,000 20,735 18,000 17,000 2008 2009 2010 Q3-2010 Q3-2011 Tangible Intangible The Group’s assets have grown by approximately 2% year on year

Leverage Debt-Equity 0.90 0.84 0.80 0.66 0.70 0.60 0.55 0.50 0.37 0.37 0.40 0.30 0.20 0.10 - 2008 2009 2010 Q3-2010 Q3-2011 The Group’s debt/equity ratio remains steady at 0.37

LHP – Annualised premium income (API) Settled API ($million) 350 300 62 250 66 71 200 45 150 47 230 100 190 182 133 114 50 0 2008 2009 2010 Q3-2010 Q3-2011 GLOC GLL LHP sales have been robust in 2011 and are trending ahead of 2010 levels.

LHP – Gross premium written GPW ($million) 2,500 2,000 455 372 460 374 1,500 540 392 452 395 407 399 1,000 1,246 1,193 500 1,048 999 878 0 2008 2009 2010 Q3-2010 Q3-2011 GLOC GLL FATUM The strong levels of new business continue to drive up gross premium income.

LHP – Net premium income (NPI) NPI ($million) 2,500 2,000 436 352 445 1,500 335 523 353 434 395 395 1,000 387 1,198 1,097 500 986 916 844 0 2008 2009 2010 Q3-2010 Q3-2011 GLOC GLL FATUM There have been no material changes to our reinsurance structure over the year.

Caribbean P&C - GPW Gross premiums written ($million) 1,600 1,400 252 1,200 263 243 1,000 186 218 800 600 1,108 1,009 964 916 400 784 200 0 2008 2009 2010 Q3-2010 Q3-2011 GGIL FATUM Gross premiums written grew by 35.7% year on year principally due to new business written through our Global Network Partners and organic growth in Holland (via FATUM)

Caribbean P&C Combined ratio (caribbean operations) 110% 100% 90% 80% 70% 60% 50% 2006 2007 2008 2009 2010 Q3-2011 The combined ratio for the Caribbean P&C has been consistently below 100% - this reflects the Group’s conservative underwriting policies and excellent reinsurance protection.

International P&C - GPW Gross premiums written ($million) 1,200 1,000 167 800 160 153 123 600 148 918 400 736 741 707 463 200 - 2008 2009 2010 Q3-2010 Q3-2011 Quota share All other Premiums written in the International P&C segment relate primarily to underwriting at Lloyd’s - the decline year on year reflects the reduced underwriting (with an exit from underwriting new risks from Q3 onwards)

Asset Management – Assets under management (AUM) (TT$Bn) 9.0 8.0 8.0 7.0 7.4 6.9 6.0 6.2 5.0 4.0 3.0 2.0 1.0 - 2008 2009 2010 Q3-2011 Assets under Management increased by 8% from 2010 and shows a steady increase over time

Asset Management – Revenue & Profits 60.0 50.0 50.0 41.7 40.2 40.0 35.0 30.1 30.0 18.1 17.1 20.0 13.0 11.2 7.5 10.0 - 2008 2009 2010 Q3-2010 Q3-2011 Revenue ($M) PAT ($M) Revenues increased by 4% from comparative period in 2010; PAT is lower due to softer investing climate

Investment mix 2010 Q3-2011 Investment Investment properties properties Government Government 8% securities 13% 7% 11% securities Debentures & 6% 7% Debentures & Corporate bonds 8% Corporate bonds 8% Other 0% 0% Other 49% 48% 19% 16% Equities Equities Term Deposits Term Deposits Cash & Cash equivalents Cash & Cash equivalents

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