Durrant Pate/Contributor

Trinidad-based Caribbean insurance giant, Guardian is reporting bumper insurance claims from customers in Jamaica and the Eastern Caribbean impacted by the historic Hurricane Beryl.

The company is now in the process of damage assessment and restoration. In its just-released second-quarter results, Guardian reports, “The impact of net claims incurred from Hurricane Beryl is still being assessed and will be reflected in the group’s third-quarter results.  

Guardian delivered a solid performance for the June quarter in which profit attributable to equity shareholders closed on TT$401 million exceeding the prior year’s restated results of TT$378 million by TT$23 million or six per cent. 

This solid performance was achieved from the sustained growth of its diverse operations across the English-speaking and Dutch Caribbean markets and against a backdrop of complexities in the external environment from elevated levels of inflation, economic uncertainties, volatilities in global financial markets and changes in the market landscape. 

Drivers of improved profitability

The year-over-year improvement in profits of TT$23 million or six per cent higher was mainly driven by improved net insurance service results, higher insurance brokerage fees and commission income, lower net insurance finance expenses, lower other operating expenses and lower taxation expenses partially offset by lower net investment income. 

Guardian’s balance sheet metrics remain strong and capital levels are robust. The group’s equity value per share increased from TT$14.88 to TT$18.04 and earnings per share increased from TT$1.63 to TT$1.73. 

This upward trend in ratios was achieved although the prior year’s results included a one-off net fair value gain that did not recur in the current period. Insurance revenue grew by TT$262 million or 10 per cent over the prior year from continued growth in core business driven by the group’s deliberate focus on key strategies and transformational initiatives to deliver the greatest possible value to our clients through our customer service and product offerings. 

Business segments performance

The ‘Life, Health and Pension’ (LHP) segment contributed insurance revenue of TT$1.4 billion, up from TT$1.3 billion in 2023 by TT$94 million or seven per cent. Insurance revenue increased on all lines except Individual Health, as clients continued to service their policies coupled with new business growth across all territories. 

This year-over-year increase in revenue was partially offset by increased insurance service expenses mainly due to health claims and directly attributable expenses. 

‘Property and Casualty’ (P&C) reported higher insurance revenue of TT$1.5 billion, up from TT$1.3 billion in the prior year by TT$169 million or 13 per cent, principally from operations in the Trinidad and Tobago, Jamaica and Dutch Caribbean markets. 

Both the property and motor lines of business experienced revenue growth as they continued to build strong momentum. The year-over-year revenue growth was partially offset by higher insurance service expenses and higher net expenses from reinsurance contracts held. 

Notably, reinsurance markets continued to generally tighten thus resulting in increased reinsurance expenses primarily on the property book of business. 

Net income from investments contracted

Net income from investing activities went down by TT$93 million mainly from lower current year net fair value gains of TT$171 million when compared to the prior year. Excluding the previously referenced non-recurring net fair value gain of TT$174 million in the prior year’s results, Guardian would have achieved a normalised year-over-year increase in net fair value gains of TT$2 million. 

Other year-over-year movements in net income from investing activities include higher investment income, higher realised gains and a lower level of impairment losses partially offset by reduced foreign exchange gains and lower fee income. 

Net insurance finance expenses decreased by TT$3 million over the prior year, mainly from Guardian’s LHP segment partially offset by an increase in the P&C segment. Among other items, finance expenses include the flow-through of the portion of net income from investment activities that is associated with insurance products with an investment component. 

The ‘Insurance Brokerage’ segment recorded fee and commission income of TT$131 million, up 11 per cent from the prior year. This was mainly due to increased income from its operations in the Netherlands, Dutch Caribbean and Cayman Islands. 

Asset management performance

The ‘Asset Management’ segment reported year-over-year growth in after-tax profit for the period of 52 per cent from improved net investment income results together with lower operating expenses. Guardian continues to focus efforts on developing this segment through third-party business, increased structuring, and trade activities. 

The group remains sufficiently capitalised and compliant with regulatory ratios with its diversified business model continuing to position the teams well to respond to the changing business landscape and to navigate the ongoing uncertainties in our investment markets and the macro environment. 

Dividend declared

Based on the overall strong performance of the half year under review, the directors have proposed an interim dividend of 23 cents (2023: 22 cents) to be paid to shareholders on record as at August 16, when the register of members will be closed for this purpose.