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

LIFE HEALTH AND PENSION INTERNATIONAL PROPERTY & CASUALTY ASSET MANAGEMENT STRATEGIC ALTERNATIVE INVESTMENTS

GLOC (100%) GLL (100%) FATUM LIFE CURACAO (100%) FATUM LIFE ARUBA (100%) FATUM HEALTH (100%) GGIL (100%) WIA (100%) FATUM GENERAL CURACAO (100%) FATUM GENERAL ARUBA (100%) TNI (54%) RSA (25%) GUARDIAN RE (100%) JGHL (39.05%) RGM (33.33%) SERVUS (50%) ECGPC (40.5%) LAEVULOSE (91%) GAM (100%)

CARIBBEAN PROPERTY & CASUALTY

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

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

• ptimistic that it will achieve an annual revenue least equivalent to that of

2010.

3,458 3,457 4,263 1,992 1,853 615 1,152 1,259 639 499

1,000 2,000 3,000 4,000 5,000 6,000 2008 2009 2010 Q2-2010 Q2-2011

Total revenue ($millions)

Insurance Activities Investing Activities

Three year History

(before operating expenses and finance charges)

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

217 252 230 120 117 615 1,041 1,175 594 460

200 400 600 800 1,000 1,200 1,400 1,600 2008 2009 2010 Q2-2010 Q2-2011

Net Income ($millions)

Insurance Activities Investing Activities

Geographic distribution of revenue

The Group’s revenue remains well distributed with a slight

• verweighting in Trinidad and the Eastern Caribbean

1.6 ; 63% 0.4 ; 17% 0.5 ; 19% (0.0); -1%

Q2-2010 - $2.44 billion

Trinidad & other Caribbean Jamaica Netherland Antilles Non Caribbean

1.2 ; 51% 0.4 ; 19% 0.5 ; 21% 0.2 ; 9%

Q2-2011 - $2.33 billion

Trinidad & other Caribbean Jamaica Netherland Antilles Non Caribbean

Three year History

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)

135 108 83 44 48

• 20

40 60 80 100 120 140 160 2008 2009 2010 Q2-2010 Q2-2011

Finance costs ($millions)

Balance Sheet composition

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”

22,035 21,710 20,988 22,073 22,028 19,012 19,368 17,857 19,556 18,771 3,023 2,342 3,130 2,516 3,257

• 5,000

10,000 15,000 20,000 25,000 2008 2009 2010 Q2-2010 Q2-2011

Consolidated Balance Sheet ($million)

Total assets Total liabilities Net equity

Consolidated total assets

Intangible assets now represent 1.2% of total assets compared to 3% in 2008

17,000 18,000 19,000 20,000 21,000 22,000 2008 2009 2010 Q2-2010 Q2-2011

21,391 21,440 20,735 21,803 21,774 644 270 253 269 254

Total assets ($million)

Tangible Intangible

Composition of assets

The Group’s balance sheet reflects its significant strength

• 59% of the Group’s assets are represented by cash and financial

assets (investments)

• 5.0

10.0 15.0 20.0 25.0 2008 2009 2010 Q2-2010 Q2-2011

10.7 10.6 11.2 11.3 11.2 3.0 2.2 1.5 2.0 1.8 2.6 2.3 2.5 2.2 2.9 5.7 6.6 5.9 6.6 6.1

Total assets ($billion)

Financial assets Cash & cash equivalents loans & receivables All other assets

Earnings per share

EPS is down comparative to the same period for 2010 but management expects to narrow this gap over the coming six months

• $0.27

$1.81 $1.92 $1.02 $0.44

• $0.26

$1.75 $1.87 $0.98 $0.43

• $0.50

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2008 2009 2010 Q2-2010 Q2-2011

EPS

Basic Diluted

Leverage

Debt to equity ratio continues to be well managed and remains unchanged from the 2010 year end at 0.37

• 0.10

0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 2008 2009 2010 Q2-2010 Q2-2011

0.66 0.84 0.37 0.74 0.37

Debt-Equity

LHP – Annualised premium income (API)

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.

182 230 190 75 83 71 62 66 31 29

50 100 150 200 250 300 350 2008 2009 2010 Q2-2010 Q2-2011

Settled API ($million)

GLOC GLL

LHP – Gross premium written

Our book of total premium income continues its increasing trend reflecting our strong sales performance and our high level of retention

• f existing business.

1048 1193 1246 589 644 395 452 540 280 269 460 372 455 318 315

500 1,000 1,500 2,000 2,500 2008 2009 2010 Q2-2010 Q2-2011

GPW ($million)

GLOC GLL FATUM

LHP – Net premium income (NPI)

Similarly our retained business continues to exhibit strong growth

986 1,097 1,198 558 580 395 434 523 271 262 445 352 436 264 258

500 1,000 1,500 2,000 2,500 2008 2009 2010 Q2-2010 Q2-2011

NPI ($million)

GLOC GLL FATUM

Caribbean P&C - GPW

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)

916 964 1,009 508 822 186 243 263 167 200

200 400 600 800 1,000 1,200 1,400 2008 2009 2010 Q2-2010 Q2-2011

Gross premiums written ($million)

GGIL FATUM

Caribbean P&C

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.

50% 60% 70% 80% 90% 100% 110% 2006 2007 2008 2009 2010 Q2-2011

Combined ratio

(caribbean operations)

International P&C - GPW

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

1,538 926 746 488 334 152 168 162 83 79

• 500

1,000 1,500 2,000 2008 2009 2010 Q2-2010 Q2-2011

Gross premiums written ($million)

Quota share All other

Asset Management – Assets under management (AUM)

Assets under management increased by 5% from year end 2010

6.2 7.8 7.4 7.8

• 1.0

2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2008 2009 2010 Q2-2011

(TT$Bn)

Asset Management – Revenue & Profits

30.1 35.0 50.0 24.8 24.7 7.5 11.2 18.1 10.7 6.6

• 10.0

20.0 30.0 40.0 50.0 60.0 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

7% 49% 19% 0% 8% 6% 11% 2010

Investment properties Government securities Debentures & Corporate bonds Other Equities Term Deposits Cash & Cash equivalents

8% 49% 16% 0% 8% 6% 13% Q2-2011

Investment properties Government securities Debentures & Corporate bonds Other Equities Term Deposits Cash & Cash equivalents