GTM unaffected by Global Financial Fallout

Sep 25, 2008 News

…company achieved and surpassed its targets –Chairman

Despite the untoward developments in the Global Financial Market, especially recent happenings in the U.S, there has been no direct or indirect impact on Guyana and Trinidad Mutual Fire Insurance Company Limited (GTM) but the situation will continue to be closely monitored as it develops.

In fact, according to Chairman of the Board of Directors of GTM, Harold Davis, during his report to the company’s 128th Annual General Meeting, the company achieved and surpassed its targets.

The chairman told the AGM that for Fire Insurance, despite the challenges faced during the year under review, the company acquired new business amounting to $24.4B in sums insured with premium income of $131.6M.

He added that after taking into account policies that were written off, the net increase in business amounted to $7.5B in sums insured and $30.6M in premium income.

According to Davis, “This shows that the company ended the year with business in force amounting to $162.6B in sums insured and premium income of $946.9M compared with $155.1B and $916.4M respectively at the end of the preceding financial year 2007.

“These figures represent increases of 4.8 per cent and 3.3 per cent in sums insured and premium income respectively.”

He noted also that in the area of claims, gross claims paid and provided for amounted to $385.8M compared to $320.9M for the preceding year and after taking into account recoveries from reinsurers of $91.4M, the net claims paid and provided for amounted to $294.4M compared to $280.4M for the financial year 2007.

Davis also used the opportunity to lament the fact that over the years, on several occasions, the company has had to express concern at the tragic accidents occurring on the roadways.

The chairman also lamented the fact that the implementation of traffic lights appeared to have created a new breed of driver, “the one who impatiently overtakes on the inside and outside, creating a hazard to those law-abiding drivers who exercise patience.”

He said that there is also “the type of driver who treats the amber light as though it is a green light to speed as fast as he can.”

Given that the company, according to Davies, has a stake in the safety of people using the roads, it has, in conjunction with the other companies in the industry, taken the initiative to impose restrictions on the drivers of minibuses and hire cars, “as experience has shown that the often high turn over of inexperienced drivers is a significant contributing factor to reckless and improper driving on the roads…We hope these measures will enhance the efforts being made by the authorities to curb traffic lawlessness.”

He noted that for the year under review, 2008 gross motor premiums amounted to $621.6M compared to $545M for the previous year and gross motor claims paid totalled $173.2M, compared to $171M the previous year.

Davies added also that the accident and liability portfolio showed a decrease from $92.6M the previous year to $52.6M this year.

He credited the decrease to a decision that was taken in late 2007 to hold on to the granting of performance, mobilization and bid bonds until such time as the contracts under which they are granted are reviewed.

As it relates to cash profits for the company, Davies said that he was pleased to report that the company has once again performed very well with a declaration of cash profit return of 55 per cent of premiums received during the last triennium that has been made.

He noted that the persons that possessed participating policies with the Company could look forward to receiving a cash return of premiums.

“The declaration for this year amounts to $60.7M after making allowance for expired time…Cheques payable to those entitled to cash profit returns this year have already been prepared and will be posted tomorrow (today).”

The Balance Sheet for GTM illustrated the company’s total assets at $3.3B compared to $3.1B for the preceding year which represented an increase of 6.6 per cent, while Revenue over expenditure was $165.8M compared to $178.8M the previous year.

Davies also reported that despite the fact that there was a smaller increase in investment income as compared to the previous year, the company saw it fit to declare a final dividend of 5.75 per cent on ‘Scrip and Stock’ capital for the year.

The chairman also noted that given the company’s policy of seeking out ways in which it could enhance business practices as well as developing products to fit the needs of the ever-changing lives of our customers.

“To this end we have embarked upon projects and policies designed to ensure that the insuring public is fully aware of the GTM brand.”

He noted that in Guyana the company introduced the ‘Power Discount Card,’ that offers policyholders a 10 per cent discount on fire and motor insurance, provided they have two or more types of insurance with the Company or the sister company GTM Life.”

Davies also used the opportunity to announce that in the coming year, the company will begin to address the needs of niche markets.

The opportunity that was held at the National Cultural Centre was modestly attended and saw Davies being re-elected as Chairman of the Board along with two other directors, peer Fraser and Lloyd Validum, all of whom were scheduled to retire but were still eligible for re-election.

Several Bursary awards for the children of several policy holders as well as staff members who performed well at the recently concluded Grade Six assessment examination were handed out.

Gifts and trophies as well as cash vouchers were presented to outstanding and long serving employees of the company.

Latest News