The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Family Guardian’s general insurance agency broke the $4m top-line barrier for the first time in 2018, its group president saying this showed it shrugged off a “challenging economy”.

Glen Ritchie told Tribune Business the BISX-listed life and health insurer had delivered a strong full-year despite the drag produced by the capital markets, investments and pensions business it is selling to Leno Corporate Services.

“FamGuard’s profits are up by 13.2 percent on a net income basis,” he said, “and net income attributable to ordinary shareholders is up by 16.7 percent. They are very strong results, and the strong capital and liquidity position allowed us to redeem $5m worth of preference shares.

“When you look at the top line, total gross premium income was up 4.4 percent with a challenged economy. Family Guardian Insurance Agents & Brokers achieved in excess of $4m in gross premiums for the first time in history in 2018. That’s continually growing.”

With around 200 agents between Family Guardian’s home service and financial services divisions, and spread nationwide across The Bahamas, Mr Ritchie said the insurer was increasingly exploiting the ability to cross-sell products to clients.

“It’s really taking hold,” he added. “We’re taking advantage of the cross-selling and branding, and doing a lot of advertising. On the customer delivery side, we have the IT 20/20 vision which we launched on January 1.

“We implemented a state-of-the-art home service system. Our agents are out there with tablets taking electronic applications, and that’s part of improving customer service delivery and part of our strategic plan.”

Mr Ritchie added that Family Guardian had also made adjustments to the reinsurance programmes for its Bahama Health product line in a bid to drive increased efficiencies and reduce costs.

“You’ll see on the reinsurance side that we did some strategic changes with the reinsurance programmes, and partnered with Quality Health Management on the Bahama Health side to enhance service delivery and cost containment measures. That will bear fruit from January 1, 2019,” he told Tribune Business.

Family Guardian was also focused on human resources development, Mr Ritchie added, to identify persons who could become managers and occupy key positions within the company, thereby developing the next generation of leaders.

The BISX-listed insurer earlier this week announced that it was offloading its under-performing pensions and capital markets business to Leno Corporate Services. The sale of its FG Financial, FG Capital Markets and FG Financial Fund Ltd subsidiaries to a competitor will eliminate a frequent drag on the BISX-listed insurer’s profitability and shareholder earnings.

With its 12-year long venture into the pension, investments and capital markets business failing to generate the expected returns, the decision to exit will enable Family Guardian to get back to its roots and focus on its core life, health and general insurance segments.

In particular, the pensions, investment and mutual fund business produced a combined $2.207m net loss in 2016, with total income of $2.584m dwarfed by $4.791m in expenses. This slashed the $8.5m-plus net profit produced by Family Guardian’s life and health insurance segments by more than 25 percent, dropping FamGuard’s overall bottom line to just $6.311m.

And for 2017, while much improved, the capital markets and pensions business contributed just $425,000 to FamGuard’s total profitability on total income of $2.825m. Expenses had been cut by almost 50 percent year-over-year to $2.4m.

Total assets for the three business units stood at $57.003m at year-end 2017, with liabilities of $4.127m giving them just under $53m in net assets that will now be transferred to Leno in a deal that is due to close by June 1 this year.