By Al Edwards, Business Co-ordinatorGUARDIAN LIFE Limited (GLL), a subsidiary of Trinidadian-owned Guardian Holdings and the local arm of the insurance giant's operations, is to enter both the health insurance and bankassurance market, thereby positioning itself for dominance over its major competitor, Life of Jamaica (LoJ).
Speaking at an investor's briefing held at the Guardian Life Centre located at 12 Trafalgar Road, New Kingston, president and CEO, Earl Moore, said the Group will continue to be aggressive in its approach to mergers and acquisitions and investments in the context of the Caribbean Single Market Economy (CSME) and the whole approach of economic integration in the region.
"From a GLL perspective, we are happy to report that very soon we at GLL will be entering into the health insurance and bankassurance market," Mr. Moore said. "We anticipate that the group life and pension portfolio of our businesses will continue to expand in 2004."
One of major structural changes in modern banking is the convergence process of the banking and insurance sectors, resulting in the establishment of banking and insurance groups, called bankassurance.
Guardian Holdings' Group chief financial officer, Howard Dottin, said that the Jamaican subsidiary, GLL had outperformed its budget. However he said that the Jamaican operations does not recognise "embedded value", but if it were taken into account, GLL posted approximately $600 million in net profits for the year.
Speaking on the main drivers behind this performance, Group chief actuary, Neil Dingwall, said: "Over the last few years we have captured over 50 per cent of the Jamaican market, and that doesn't take into account bankassurance, coming from a zero base back in 2000. We are selling our products well and successfully. The major contributor in 2003 was the better than expected investment returns. We are expecting a more modest growth rate than we had in 2002 and 2003 for 2004. Our main focus over the last few years has been individual life. For the total life insurance market we now hold some 38 per cent of the local market. Given the lack of competition in the present health insurance market we are expecting to gain very significant market share."
Business sources said Guardian aims to partner with Grace, Kennedy in its new health initiative.
REVENUE BOOST
Mr. Dottin gave an overview of Guardian Holdings Group results expressed in US dollar terms. Revenue increased by 85 per cent year over year. In 2002, the Group posted figures of US$245 million which improved significantly in 2003, coming in at US$455 million. Of that total revenue, its Fatum subsidiary accounted for about 22 per cent, the rest resulting from natural organic growth. Share of Associated Profit fell year over year from US$28 million in 2002 to US$17 million in 2003. The reason for that is that Guardian Holdings sold off its RBTT interests in the third quarter, making its share of RBTT profits would have only been for nine months as opposed to 12 months.
The Group posted US$110 million in non-recurrent items (NRs) in 2003.
Profit over year increased by over 460 per cent but that was an aberration. If the non-recurrent items are excluded, profits would have increased by 87 per cent moving from US$32 million to US$60 million year over year. Earnings per share were calculated at US$1.02 a share compared to US$0.19 the year before but then again there were some non-recurrent items in there.
Forty-eight per cent of Guardian Holdings assets reside in Trinidad and it generates 51 per cent of its revenues.
