Technical services for the global insurance market Stockdale - - PowerPoint PPT Presentation

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technical services for the global insurance market
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Technical services for the global insurance market Stockdale - - PowerPoint PPT Presentation

Mar 22, 2023 285 likes •474 views

Technical services for the global insurance market Stockdale Growth Companies Seminar Presentation by David Marock, Group CEO Mark Keogh, Group CFO 30 November 2017 Delivering unrivalled service breadth, technical expertise and geographic

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Technical services for the global insurance market

Stockdale Growth Companies Seminar

Presentation by

David Marock, Group CEO Mark Keogh, Group CFO 30 November 2017

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Delivering unrivalled service breadth, technical expertise and geographic reach to global insurance markets

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Service breadth Technical expertise Geographic reach

The only major insurance service provider to:

  • Support every stage of

the insurance lifecycle

  • Provide insurance

services and technology solutions

  • Delivered by dedicated

teams covering life, property & casualty and health markets.

Offices

76

Countries

29

Continents

06

Service availability

24/7

People, covering every area of expertise relevant to insurance

2,000

  • Actuaries
  • Adjusters
  • Compliance

experts

  • Doctors
  • Engineers
  • Software

developers

…all delivered with a 100% focus on insurance

  • Surveyors
  • Lawyers
  • Claims

experts

  • Underwriters
  • Mediators
  • And many

more……

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Serving a huge range of the world’s leading insurers

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Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

A selection of our global client base:

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Achieving excellent returns for a blue chip shareholder register

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Revenue, £m Adjusted earnings, £m

107 113 122 143 169

2012 2013 2014 2015 2016

+58% 2012-16 7.8 8.5 10.1 13.0 14.8

2012 2013 2014 2015 2016

+90% 2012-16

Note: Small rounding differences arise in the total amounts above. * Market expectations 1. As at 29-07-11. 2. As at 31-10-17. 3. As at 31-10-17

2017: £200m*

8.8 8.8 9.4 10.0 10.5

Dividend, p

+19% 2012-16

2012 2016 2015 2014 2013

Major shareholders 20162

1. Miton Asset Management 12% 2. Delta Lloyd 12% 3. The Standard Club 9% 4. Legal & General 9% 5. Kabouter Management 8% 6. Artemis Inv Management 6% 7. Majedie Asset Management 6% 8. Soros Fund Management 3% 9. BlackRock 3% 10. Fidelity International 3%

Major shareholders 20121

1. Delta Lloyd 12% 2. Invesco Trimark 8% 3. Columbia Wanger 7% 4. Kabouter 5% 5. Ruffer Inv Management 5% 6. Legal & General 4% 7. Private shareholder 3% 8. Schroder Inv Management 3% 9. Mawer Inv Management 3% 10. Columbia Management 3%

Total shareholder return %3

117%

~25% Percentile FTSE Small Cap index 2012-2016

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Offering a uniquely broad range of technical services to enable our clients to address their challenges

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Insurance Management

End-to-end management of insurers & insurance programmes under a long-term model

  • f “partnership”

Claims Programme Management

Specialist, high- quality third party claims administration & related services across the full claims lifecycle

Loss Adjusting

Specialist, high- quality loss adjusting & related services across all major lines and geographies

Specialist Outsourced Services

Tailored, high-quality underwriting, broking, risk & compliance, administration & investment management services Solutions for releasing capital from legacy non-life & life portfolios via outsourced management or sale

Insurance Technology Services

Technology-related solutions and services to help insurance businesses drive change

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Ability to offer blended technology solutions Embedding technology in services Proven volume claims capability Resourced to manage larger claims Our insurance services are in demand in all market conditions Offering global network of local

  • ffices, where clients need us most

Strong reputation as a supplier of wide range of high quality services

Charles Taylor advantages

Increased client demand New markets entrants Volume claims unaffected Insurers anticipate increase in larger claims Insurance demand growing Growth of emerging markets’ insurance demand Migration to suppliers that can be strategic partners

Implications

Meeting the demands of a changing insurance world

Disruptive and enabling emerging technology Protracted benign claims market for larger claims Growing but more volatile world economy Globalisation of insurance Consolidation across all areas of insurance market

Global market themes

5

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Delivering a clear growth strategy

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Business model Growth priorities Vision

  • Vision:

To become the professional services provider

  • f choice to the global insurance markets
  • Business model:

Our relationships with our clients and colleagues underpin our business model

  • Growth priorities:

Focused on building a larger, more capable, more profitable professional services business

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Investing for growth - our investment in insurtech demonstrates our approach to creating long term value

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  • 1. Source: Gartner

Established Charles Taylor InsureTech 2015 Acquired KnowledgeCenter 2013

Developed in-house technology capabilities

Acquired sizeable stake in Fadata 2015

Opened Technology Centre of Excellence in LatAm 2016 Appointed to implement life system for Peru’s 4th largest life insurer 2016

Developed Delegated Underwriting Authority (DUA) solution 2017

Invested in funding round for Fadata 2017 Selected as preferred implementation partner for Lloyd’s DUA solution 2017

Appointed to implement solutions for London market brokers Global insurance technology market US$166bn1

Developed TRAX London market claims solution 2012 Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Delivering our growth strategy with positive prospects for increased profit and greater shareholder value

Insurance Management Loss Adjusting Technology, Claims & Outsourced services

Solid core insurance management business with deep, long standing lasting client relationships, delivering steady, reliable growth Fundamentally strong global loss adjusting business, with leadership positions in key markets and well positioned to drive growth and improve profitability Established and newer businesses with the potential to drive a material change in earnings longer term

Cross-refer, cross-sell, and joint working

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Offering a robust investment case

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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

* US$4.8 trillion global revenues (BusinessWire, 2 February 2017) Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

Strong fundamentals Consistently profitable Positive prospects

  • Unrivalled breadth of

insurance-related professional services

  • Expert knowledge of the

insurance market

  • Enormous, worldwide base of

technical resource

  • Culture of long-term

partnership and service

  • Stable, trusted and well-

governed

  • Track record of innovation
  • Diversified, resilient business
  • Reliable revenue and profit

streams

  • Solid cashflows
  • Well supported dividend
  • Solid, reliable income from

Insurance Management

  • Well-position to improve

performance of loss adjusting

  • Huge market for insurance-

related services* and fragmented competitor landscape

  • Driving forward strategic

initiatives to capture a greater share of the market

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Appendices

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Charles Taylor Group results H1 2016 H1 2017 % change Revenue (£m) 74.0 100.7 +36.1 Adjusted PBT (£m) 6.0 6.1 +1.2 Statutory PBT (£m) 5.3 3.1* (41.4)* Adjusted earnings (£m) 5.7 6.1 +8.0 Adjusted EPS (p) 8.55 9.04 +5.8 Statutory EPS (p) 7.19 4.62* (35.8)* Dividend per share (p) 3.15p 3.31p• +5.0%

We performed steadily in H1, continuing our track record of strong revenue growth

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* Decrease due to the increase in the amortisation of intangible customer relationship assets following the successful CEGA acquisition and the reorganisation of services provided to a Management Services client Note: Small rounding differences arise in the total amounts above Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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We are investing to extend our capabilities to deliver longer-term growth in profits and shareholder value

Segmental results H1 2017 (£m) Revenue Result H1 2016 H1 2017 % change H1 2016 H1 2017 % change

Management 25.4 27.9 +10.0 3.3 3.5 +8.4 Adjusting 31.7 35.2 +11.2 1.6 1.7 +6.7 Insurance Support 16.0 37.4 +133.4 2.4 1.4 (41.1) Unallocated

  • n/a

(0.3)

  • n/a

Professional Services 73.1 100.5 +37.6 6.9 6.6 (4.6) Insurance Companies 2.3 2.2 (5.9) 0.1 0.3 +444.4 Eliminations (1.4) (2.1) n/a

  • n/a

Group revenue /

  • perating profit

74.0 100.7 +36.1 7.0 6.9 (1.1) Share of associates

  • (0.3)

(0.4)

  • 53.2

Investment /other income

  • 0.2

0.4 +146.0 Finance charges

  • (0.6)

(0.8)

  • 32.1

NCI before tax

  • (0.2)
  • n/a
  • Adj. profit before tax
  • 6.0

6.1 1.2

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Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Net debt (£m) Annual average net debt At 30 Jun 2016 (3.3) (1.2) At 31 Dec 2016 37.5 12.9 At 30 Jun 2017 35.6 30.1 Adjusting Services working capital WIP (months) Debtors (months) Working capital (months) At 30 Jun 2016 4.4 4.6 9.0 At 31 Dec 2016 4.6 4.5 9.1 At 30 Jun 2017 4.6 4.5 9.1 Retirement benefit

  • bligation (£m)

Net of deferred tax At 30 Jun 2016 56.3 46.1 At 31 Dec 2016 52.5 43.5 At 30 Jun 2017 44.8 37.2

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  • Net debt is at an appropriate level following investments
  • f Rights Issue proceeds
  • We are managing the Group’s cash position while

investing for growth

  • Increased bank facilities by £5m post HY to fund Criterion

acquisition

  • Refinances facilities on improved terms in October 2017
  • DB deficit fell largely due to changes in

mortality assumptions, positive market conditions and good investment returns

  • Multi year recovery plans are in place
  • Focused on managing down Adjusting working capital
  • Reorganised WC team and brought in specialist to focus
  • n UK billings and collections

Net debt is at an appropriate level taking into account cash profile of Group

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Free cash flow

£m H1 2016 H1 2017 Operating cash flow before movement in working capital Change in working capital Change in insurance company net assets 8.3 10.2 2.2 5.7 7.0 3.5 Cash flow generated by operations Income tax paid Interest paid 20.7 (0.1) (0.5) 16.2 (0.8) (1.0) Net cash flow before movement in client funds Net capital expenditure Interest received 20.1 (4.7) 0.2 14.4 (3.7) 0.2 Free cash flow 15.5 10.9

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Note: Small rounding differences arise in the total amounts above Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Segmental balance sheet

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£m 30 June 2016 30 June 2017 Professional Services Owned Insurance Companies Group Professional Services Owned Insurance Companies Group Management Services

2.5

  • 2.5

6.3

  • 6.3

Adjusting Services

179.3

  • 179.3

199.6

  • 199.6

Insurance Support Services

62.5

  • 62.5

117.8

  • 117.8

Unallocated and eliminations

26.3

  • 26.3

25.1

  • 25.1

Owned Insurance Companies

  • 1,133.9

1,133.9

  • 1,137.0

1,137.0

Total assets

270.6 1,133.9 1,404.5 348.8 1,137.0 1,485.8

– Non-current assets

85.0 2.1 87.1 122.2 1.9 124.1

– Current assets

185.7 1,131.7 1,317.4 226.6 1,135.1 1,361.7

Total assets

270.7 1,133.8 1,404.5 348.8 1,137.0 1,485.8

Current liabilities

(153.6) (1,112.4) (1,266.0) (193.1) (1,124.5) (1,317.6)

Deferred consideration

(1.6) (8.1) (9.7) (5.7)

  • (5.7)

Net current assets

30.5 11.2 41.7 27.8 10.6 38.4

Non-current liabilities

(62.1)

  • (62.1)

(84.7)

  • (84.7)

Deferred consideration

(1.4) (4.4) (5.8) (3.7)

  • (3.7)

Total liabilities

(218.7) (1,124.9) (1,343.6) (287.2) (1,124.5) (1,411.7)

Net assets

52.0 8.9 60.9 61.6 12.5 74.1

Non-controlling interests

(2.1)

  • (2.1)

(2.0)

  • (2.0)

Equity attributable to owners of the Company

49.9 8.9 58.8 59.6 12.5 72.1 Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

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Retirement benefit schemes

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Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017

Certain Group employees are members of one of four DB schemes operated by the Group. The schemes are subject to independent triennial valuations at which point funding is reviewed. The Group also operates a DB scheme for certain employees in Indonesia. The schemes is not a material balance to the Group.

Charles Taylor & Co Limited Retirement Benefits Scheme Richards Hogg Pension & Life Assurance Scheme ER Lindley & Co Limited Pension Plan Wm Elmslie & Sons 1972 Pensions & Life Assurance Fund

Last valuation date 1 July 2013 1 May 2016 1 July 2014 1 January 2015 Net deficit at H1 17 £28.0m £15.9m £0.7m £0.0m Last 12 months contributions £2.8m £1.6m £0.0m £0.0m

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Banking facilities

17 UK facilities Review date Currency Facility Revolving credit facility October 2022 GBP 70,000,000 RBS overdraft Annual GBP 2,500,000 HSBC overdraft Annual GBP 2,500,000 Total UK facilities 75,000,000 Overseas facilities Review date Currency Spot rate Facility Citizens US facility Bi-annual USD 9,500,000 1.301074 7,301,660 HSBC Hong Kong facility Annual USD 3,750,000 1.301074 2,882,234 HSBC Canadian facility Annual CAN 1,800,000 1.690558 1,064,737 Total overseas facilities 9,728,503 Accordion facility Uncommitted 25,000,000

Charles Taylor plc Stockdale Growth Companies Seminar 30 November 2017