GUARDIAN Holdings Limited (GHL) is setting its sights on Europe as its next major growth market to move the needle for the regional insurance and wealth conglomerate.

Most of GHL’s revenue comes from its domestic market in Trinidad & Tobago while Jamaica brings in most of the group’s profit before tax. However, its Dutch Caribbean market, which holds its Netherlands business through Fatum, is its fastest-growing business segment. The Dutch Caribbean segment grew revenue by 15 per cent to TT$1.32 billion, and saw its share of group profit before tax improve from 15 per cent to 19 per cent in 2023. This is accompanied by the fact that there is a 19 per cent return on equity from this business line.

“My opinion in terms of our greatest opportunity, I would have to say Europe. Looking at our business there, and for opportunities and partnership, with our Netherlands business that has the greatest potential because it’s a very large market. That said, I do believe the eastern Caribbean is another important place for us to increase our penetration because, on average, we have lower market share in the eastern Caribbean than we do in our larger markets so there is a significant market share penetration opportunity there. But if I have to go on pure size and volume, it would be our ability to expand selectively into the very, very large European market via our Netherlands franchise,” said GHL Chief Executive Officer Ian Chinapoo at the company’s May 2 annual general meeting (AGM).

GHL’s Netherlands business benefits from 35 authorised agents and 180 agents in the European country. The Netherlands is set to become the springboard for a carefully managed expansion into other European markets. This has created a case, according to Chinapoo, for the business to receive more capital to fund its growth ambitions. It currently has a dominant market presence in the ABC Caribbean islands for pension fund management, and a growing insurance presence.

When the GHL CEO was asked about acquisitions to grow market share in some Caribbean markets he responded, “We are looking at both organic and inorganic means of growth which include just not companies, but portfolios so we can actually access, and purchase portfolios of business, from other insurers or other people without buying the whole company. So, we’re looking at all options — inorganic and organic.”

GHL’s life, health and pension business makes up half of its insurance revenue but 70 per cent of its net insurance and investment result. Its property and casualty business covers its general insurance arm, which has had to negotiate with reinsurers to maintain its ability to grow its business.

“I’m pleased to advise that we’ve been able to maintain our cover and we didn’t lose any [capacity]. We were able to, in the vast majority of cases, maintain it at existing prices. So, we know that Guardian Group has earned very high regard with our reinsurers, and they continue to support us, and as we go forward we have to manage rising replacement costs, rising claims, inflation,” Chinapoo added.

Although GHL was able to maintain enough reinsurance, the ‘hard market’ for other Caribbean reinsurers means that the company expects to maintain stability in its general insurance earnings. Guardian General Insurance Limited President Dean Romany mentioned during an earnings call on May 9 that Jamaica had the highest rate increases across the region, ranging from 50 to 100 per cent. Chinapoo even agreed that he believes the Jamaican market is underinsured.

GHL restated its first-quarter report for the 2023 period as it adjusted for the non-recurring gain from Guardian Life Limited’s business model change related to IFRS 9 and IFRS 17. As a result, GHL’s Q1 2024 insurance revenue was up 12 per cent to TT$1.41 billion, largely from the property and casualty business lines. However, an increase in the insurance service expenses and reinsurance contracts resulted in the net insurance result only being up nine per cent to TT$181.88 million.

Due to higher operating expenses and finance expenses on insurance contracts, operating profit was down one per cent to TT$302.43 million. An increase in taxes resulted in consolidated profit declining eight per cent to TT$236.67 million, with net profit attributable to shareholders of TT$233.83 million.

Some GHL shareholders asked about the company considering a share buy-back, with other cross-listed firms like GraceKennedy Limited and JMMB Group Limited executing their programmes. While GHL Chairman Robert Almeida wasn’t against having a buy-back outright, he said the company had other priorities now. GHL tried a share buy-back in February 2009 before prematurely ending it six months later.

GHL’s stock price closed Friday at $370/TT$17.50, which leaves it marginally up on the Jamaica Stock Exchange (JSE) but down eight per cent on the TTSE. GHL’s book value is TT$17.37, which translates to a price-to-book ratio of 1.01 times. Trinidadian shareholders should look forward to seeing Guardian Life of the Caribbean Limited’s audited financials by June 30.