Sat | Nov 28, 2020

Guardian profit spikes with help from NCB Insurance

Published:Wednesday | November 18, 2020 | 12:05 AM
Patrick Hylton, chairman of Guardian Holdings Limited and President and CEO of NCB Financial Group Limited.
Patrick Hylton, chairman of Guardian Holdings Limited and President and CEO of NCB Financial Group Limited.

Regional insurance company Guardian Holding Limited, GHL, grew its profit by three-quarters for the July-September period, assisted by the inclusion of the newly acquired NCB Insurance life and annuities portfolio.

The results redounded to the benefit of GHL’s Jamaican parent company NCB Financial Group, which reported profit of $27 billion last week.

GHL made profit of TT$322.6 million, or $7.1 billion in local currency, for the September quarter, up from TT$187 million, or $3.9 billion, a year earlier.

“These results are a noteworthy achievement, as we continue to manage through the impact of the pandemic on our business,” said GHL Chairman Patrick Hylton in a statement prefacing the insurance conglomerate’s financial results.

“During the quarter, Guardian Life Limited, our Jamaica life, health and pension insurer, acquired the life and annuity portfolio of NCB Insurance Company,” said Hylton, who is also president and CEO of NCB Financial Group.

The acquisition of the insurance portfolio should serve to reduce expenses through “synergies” by eliminating redundant systems, and lower the combined reserves and capital requirements due to the larger scale of assets and liabilities, and provide opportunities for better asset-liability matching, the chairman stated.

Despite reduction in in-person business transactions due to the pandemic, GHL gross premiums grew 2.0 per cent year-on-year. Property and casualty business premiums grow 7.0 per cent, but there was a 2.0 per cent reduction in premiums for life, health and pension business.

GHL earned gross premiums of TT$1.47 billion, up from TT$1.44 billion in the September 2019 quarter. Over nine months, GHL earned TT$476 million in profit from TT$5 billion in gross premiums, compared to earnings of TT$443 million from gross premiums of TT$4.9 billion in the 2019 period.

The GHL group, which operates in over 20 markets, recorded a fourfold growth in operating cash, and closed the quarter with net cash holdings of TT$1.3 billion, up from TT$57.6 million the previous year.

In September, GHL raised funds in a corporate bond in Jamaica. The company utilised the proceeds of the issue for “balance sheet support for an unnamed GHL subsidiary”, but it occurred during the period that its Jamaican subsidiary Guardian Life was absorbing the operations of NCB Insurance.

NCB Financial took over GHL last year, when it doubled its stake in the insurance conglomerate to 62 per cent. Then earlier this year, NCB Financial announced plans to transfer the insurance and annuities business of NCB Insurance to Guardian Life to generate synergies and reduce redundancies.

NCB Insurance was subsequently rebranded as NCB Insurance Agency & Fund Management Limited. It continues to operate as a pension fund administrator and investment manager, but is also now an insurance agent selling products on behalf of Guardian Life.