Guardian Life’s (GLL) preliminary results are indicating that it has surpassed total revenue targets by 49% to earn $7.3 billion for the financial period ending December, 2006. This announcement was made by Earl Moore, President & CEO at the Company’s 7th Annual Awards and presentation ceremony held at the Jamaica Pegasus Hotel recently, (Feb. 22).
Citing macro economic conditions, Moore noted that “this achievement was made amidst a challenging economic and political environment.� He further stated that “the year 2006 marked the seventh year of operation for Guardian Life and its most challenging year yet, in relation to market conditions and a consolidating financial services sector. The year was characterized by a significant decline in benchmark interest rates, a sluggish equities market, declining inflation rate and a relatively stable foreign currency market. The six-month Treasury Bill rate went to its lowest level in more than a decade in November 2006 at 12.28%, and closed the year at 12.31%.�
The firm’s Net Premium income totaled $4.5 billion, representing an increase of 28% over budget and 71% over 2005, mainly arising from the significant growth in our health and annuities portfolios.
The Guardian Life executive also noted that “we were able to meet our interest income targets for 2006 and surpassed 2005’s income by 15%;� this he attributed to “expert treasury and investment management�.
With regards to Guardian Life’s equities portfolio performance, Moore reported that “the equities portfolio out-performed the All Jamaica Composite Index with an average return of 6.6% for the year, exclusive of dividends. The company ended the year by growing net investment income by 11% over 2005.� This is contrasted to the calendar year-to-date performance of the stock market which saw a 3.7% decline in the Main JSE index and marginal growth in the All Jamaica Composite and Jamaica Select indices of 2.16% and 2.91% respectively.
In the area of operating expenses, the company continues to maintain its management and operating expenses below projections and within inflation rate levels.
“At the end of the year, expenses relating to the individual life and pensions portfolios were only 5% higher than 2005, comparing favourably with the 5.8% calendar year inflation rate,� President Moore said.
“Our efficiency or cost-to-income ratios continue to improve year-on-year as we strive for Operational Efficiency. The ratios of operating expenses to premium income and revenue, excluding exceptional items, registered 2% and 15% improvement respectively,� said Moore.
According to Moore, another area of improvement for the insurance giant is that of asset performance: “the total asset base of the company increased by approximately 25% to $26.9 billion. Invested Assets increased by 24% to close the year at $18.9 Billion. The major increases in invested assets were from Repurchase Agreements and Investment Securities which grew by 74% and 14% respectively.�
Funds under management ended the year at $18 billion, registering an increase of 12.5% over 2005.
These positive results, the President told the gathering, “highlight the benefits of pursuing and achieving the company’s strategic objectives of growing core revenue, operational efficiency and customer-centricity, while ensuring adequate risk management and we commit to continue in our “Pursuit of Excellence� in 2007.�
