Financial results for the six months ended 30 June 2011 Jeff Mack - PowerPoint PPT Presentation

Financial results for the six months ended 30 June 2011 Jeff Mack [11-Aug-11]

Operating segments Operating Segments CARIBBEAN INTERNATIONAL STRATEGIC LIFE HEALTH AND ASSET PROPERTY & PROPERTY & ALTERNATIVE PENSION MANAGEMENT CASUALTY CASUALTY INVESTMENTS GLOC GGIL GUARDIAN RE GAM RGM (100%) (100%) (100%) (100%) (33.33%) GLL WIA JGHL SERVUS (100%) (100%) (39.05%) (50%) FATUM LIFE FATUM GENERAL ECGPC CURACAO CURACAO (40.5%) (100%) (100%) FATUM LIFE FATUM GENERAL LAEVULOSE ARUBA ARUBA (91%) (100%) (100%) FATUM TNI HEALTH (54%) (100%) RSA (25%)

Consolidated financial highlights - 2011 Consolidated financial highlights 2011 2010 Change Gross premiums written 2,617,132 2,434,285 7.5% Net premiums written 1,889,372 1,996,375 -5.4% Net premiums earned 1,773,963 1,918,822 -7.5% Net income from insurance activities 116,564 120,012 -2.9% Net income from investment activities 459,572 594,328 -22.7% Finance charges (47,553) (44,319) 7.3% Profit after tax 102,451 217,222 -52.8% Earnings per share $ 0.44 $ 1.01 -56.6% Profit after tax (continuing operations) 102,451 218,043 -53.0% EPS (continuing operations) $ 0.44 $ 1.02 -57.0%

Three Year History Total revenue ($millions) 6,000 5,000 1,259 4,000 1,152 615 3,000 639 4,263 499 2,000 3,458 3,457 1,000 1,992 1,853 0 2008 2009 2010 Q2-2010 Q2-2011 Insurance Activities Investing Activities Revenues for the first six months of 2011 totalled $2.4B (11.8% down on 2010) because of lower yields on the investment market and a reduction in insurance premiums. In spite of being behind comparative to the prior year, the Group is cautiously optimistic that it will achieve an annual revenue least equivalent to that of 2010.

Three year History (before operating expenses and finance charges) Net Income ($millions) 1,600 1,400 1,200 1,000 800 1,175 1,041 600 615 400 594 460 200 252 217 230 120 117 0 2008 2009 2010 Q2-2010 Q2-2011 Insurance Activities Investing Activities The group’s net income is derived from investing activities The positive result from underwriting activities demonstrates the Group’s commitment to underwriting at a technical profit rather than for cash flow

Geographic distribution of revenue Q2-2010 - $2.44 billion Q2-2011 - $2.33 billion (0.0); -1% Trinidad & other Trinidad & other 0.2 ; 9% Caribbean Caribbean 0.5 ; 19% Jamaica Jamaica 0.5 ; 21% 1.2 ; 51% Netherland Netherland 0.4 ; 17% 1.6 ; 63% Antilles Antilles 0.4 ; 19% Non Caribbean Non Caribbean The Group’s revenue remains well distributed with a slight overweighting in Trinidad and the Eastern Caribbean

Three year History Finance costs ($millions) 160 140 120 100 80 135 60 108 40 83 48 44 20 - 2008 2009 2010 Q2-2010 Q2-2011 Finance costs continue to be managed down – the increase compared to 2010 is the result of negative carry on the $300M Bond repaid in April (reported last quarter)

Balance Sheet composition Consolidated Balance Sheet ($million) 25,000 22,035 22,073 22,028 21,710 20,988 19,556 19,368 19,012 20,000 18,771 17,857 15,000 10,000 5,000 2,342 3,023 3,257 3,130 2,516 - 2008 2009 2010 Q2-2010 Q2-2011 Total assets Total liabilities Net equity The Group’s consolidated financial position remains strong with over $22B in assets and net equity continuing to increase In recognition of this fact, AM Best confirmed A- Excellent ratings for both GLOC and GGIL and changed the outlook for the group from “negative” to “stable”

Consolidated total assets Total assets ($million) 22,000 269 254 644 270 21,000 253 20,000 21,803 21,774 21,440 21,391 19,000 20,735 18,000 17,000 2008 2009 2010 Q2-2010 Q2-2011 Tangible Intangible Intangible assets now represent 1.2% of total assets compared to 3% in 2008

Composition of assets Total assets ($billion) 25.0 20.0 5.7 6.1 6.6 6.6 5.9 15.0 2.6 2.2 2.9 2.3 2.5 3.0 2.0 1.8 2.2 1.5 10.0 11.2 11.3 11.2 10.7 10.6 5.0 - 2008 2009 2010 Q2-2010 Q2-2011 Financial assets Cash & cash equivalents loans & receivables All other assets The Group’s balance sheet reflects its significant strength • 59% of the Group’s assets are represented by cash and financial assets (investments)

Earnings per share EPS $2.50 $2.00 $1.92 $1.81 $1.50 $1.00 $1.02 $0.50 $0.44 $1.75 $1.87 $0.98 $0.43 $0.00 -$0.27 -$0.26 2008 2009 2010 Q2-2010 Q2-2011 -$0.50 Basic Diluted EPS is down comparative to the same period for 2010 but management expects to narrow this gap over the coming six months

Leverage Debt-Equity 0.90 0.84 0.80 0.74 0.66 0.70 0.60 0.50 0.37 0.37 0.40 0.30 0.20 0.10 - 2008 2009 2010 Q2-2010 Q2-2011 Debt to equity ratio continues to be well managed and remains unchanged from the 2010 year end at 0.37

LHP – Annualised premium income (API) Settled API ($million) 350 300 62 250 66 71 200 150 230 100 29 190 182 31 50 83 75 0 2008 2009 2010 Q2-2010 Q2-2011 GLOC GLL New life insurance sales are progressing well and is running in excess of 2010 levels. We expect a similar pattern to continue towards the end of the year.

LHP – Gross premium written GPW ($million) 2,500 2,000 455 372 460 1,500 540 452 395 315 1,000 318 269 280 1246 1193 500 1048 644 589 0 2008 2009 2010 Q2-2010 Q2-2011 GLOC GLL FATUM Our book of total premium income continues its increasing trend reflecting our strong sales performance and our high level of retention of existing business.

LHP – Net premium income (NPI) NPI ($million) 2,500 2,000 436 352 445 1,500 523 434 395 1,000 264 258 262 271 1,198 500 1,097 986 580 558 0 2008 2009 2010 Q2-2010 Q2-2011 GLOC GLL FATUM Similarly our retained business continues to exhibit strong growth

Caribbean P&C - GPW Gross premiums written ($million) 1,400 1,200 263 243 1,000 186 200 800 600 167 1,009 964 916 400 822 508 200 0 2008 2009 2010 Q2-2010 Q2-2011 GGIL FATUM Gross written premiums grew 51.4% year on year principally due to fronting arrangements with 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 Q2-2011 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) 2,000 152 1,500 1,000 168 162 1,538 500 83 926 746 79 488 334 - 2008 2009 2010 Q2-2010 Q2-2011 Quota share All other In 2010, the Group took a decision to reduce its exposure to writing in the international property market for 2011 – this resulted in reduced written premiums for the year comparative to 2010

Asset Management – Assets under management (AUM) (TT$Bn) 9.0 8.0 7.8 7.8 7.0 7.4 6.0 6.2 5.0 4.0 3.0 2.0 1.0 - 2008 2009 2010 Q2-2011 Assets under management increased by 5% from year end 2010

Asset Management – Revenue & Profits 60.0 50.0 50.0 40.0 35.0 30.1 30.0 24.8 24.7 18.1 20.0 11.2 10.7 7.5 6.6 10.0 - 2008 2009 2010 Q2-2010 Q2-2011 Revenue ($M) PAT ($M) Revenues remain in line with the same period last year and profit after tax is less due to additional expenses incurred during 1H 2011.

Investment mix 2010 Q2-2011 Investment Investment properties properties Government Government 8% 13% securities 7% 11% securities Debentures & 6% 6% Debentures & Corporate bonds 8% Corporate bonds 8% Other 0% 0% Other 49% 49% 19% 16% Equities Equities Term Deposits Term Deposits Cash & Cash equivalents Cash & Cash equivalents