Demerara Mutual records $338.7M after tax surplus

– chairman assures continued growth and success
THE Demerara Mutual Life Assurance Society has reported an after tax surplus of $338.7M with the Chairman Mr. Richard Fields assuring the company’s continued growth and success.


Mr. Richard Fields, standing centre, with long service awardees.

Presenting his report at the 117th annual general meeting which was held on Tuesday at the company’s Robb and Avenue of the Republic location, Field said the success of the company was made possible by the fact that the company stands on a firm foundation and a solid capital base.

Addressing patrons of these services, policyholders and other stakeholders, Fields said, “It is significant that as a result of good management your company has remained strong…The Management of Demerara Mutual remain most committed to sustaining the growth of the society.”

Alluding to the operations of its subsidiary, the Demerara Fire and General Insurance Company, Fields noted that a small profit of $379, 332 was made in 2008.

However, for the financial year ended December 31, 2008, he said Demerara Mutual Life Assurance Society recorded total revenue of $1.3B, from which the after tax surplus of $338.7M was made.

According to the company the main sources of income are premiums and investments which showed increases of 1.8 per cent and 30 per cent, respectively.

Fields said this year the total claims paid was $192.3M a reduction from the $214M which was paid in 2007.


Chairman of the Demerara Mutual Life Assurance Society, Mr. Richard Fields.

The Chairman observed too that the overall sales in 2008 was better than 2007.

“Even in the face of the same social and economic downturn the total number of individual policies sold in 2008 increased by 3 per cent over 2007,” Fields said.

He said the leading territory in sales for the year in review was Guyana with 597 policies, followed by St. Lucia.

“Our core business is to provide our customers in all territories with all types of insurance products and related financial services that are in keeping with their changing circumstances economic or otherwise…This is why we continue to find ways t develop our current line of products,” the Chairman said.

Fields also announced that in 2010 a new product line will be introduced.

The Chairman explained that in keeping with the company’s mission statement the entity was able to enhance its technological capacity mainly to speed up the delivery of services to customers in 2008.

To this end, he also pointed out that 88.4 per cent of all policies that were sold in 2008 are still in force.

As the Chairman pointed out the accomplishments of the Society, Fields opened the floor for views to be voiced there but there was no response and he proceeded with the agenda.

However, in the process of requesting a resolution for three retiring Directors to be reelected as Directors of the Society, there was some degree of unease, as one policyholder Wilfred Eleazar stepped up with an explanation that he had not recognised his opportunity to speak and would like to voice his opinion.

Eleazar was refused to be heard as a female employee of the Society rose, ignoring Eleazar’s attempt to speak, and moved a motion to accept the resolution.

This, however, angered the policyholders who refused to acquiesce to the director’s request for a vote to have the resolution carried until Eleazar was given the opportunity to complete his statement.

Eleazar was subsequently given an ear and called for the annual report to be circulated to stakeholders before the annual general meeting.

“This has been happening for two years,” he repeated, “We would like to have a chance to read it before we get here and are asked to accept the report as read.”

The Company’s Chairman responded by noting that efforts will be made to have the report circulated before the meeting.

Fields explained that circulation of the reports is a routine undertaking of the Company.

However, because of what he termed as “difficulties, the Chairman said it was not possible to make the reports available earlier.

After making this promise the meeting moved forward and a total of seven resolutions were agreed on.

The resolutions included the aforementioned call for three retiring directors to be reappointed; a call for a resolution to be made for the appointment of two or more persons as directors of the Society; an agreement to fix the remuneration of the Directors; the election of Auditors and an agreement on their remuneration; an agreement to approve the appropriation for donations to charity and for educational purposed.

The other two were calls for the adoption of the Auditor’s report and the Director’s report.

Investment
In the Chairman address he noted that, relative to the company’s investments, a priority remains further development and maintenance of various pieces of real estate.

“These parcels of land and buildings are our capital wealth which will continue to grow in value. Prime real estate has always been a solid financial investment that continually contributes to the financial growth of its owners,” the Chairman opined.

He added that while maximising the returns from investments is crucial the Society is undertaking this venture with “Due care and prudence.”

“The key to achieving this goal is by us not participating in high risk ventures which could become very detrimental to our financial position if they fail,” Fields said.

The Chairman added that achievements in the investment arena was challenging because of the new regulatory restrictions in all the territories within which the Society operates.

He said, “One of these restrictions places a cap or limit on overseas investments. The difficulty is that in Guyana local investment opportunities are not widely available.”

However, he asserted that the company has remained compliant with regulations and will continue to work with all the requirements in the territories of operation.

To this end, Fields lauded the efforts of the company’s management team which adopted certain strategies designed to deliver a better service and keep the society moving forward to greater profitability.

In recognition of such service, 33 employees were awarded for years of service to the company.

Economic downturn
The Chairman stated that these efforts have assisted the Company in achieving positive results in the financial year even in the midst of global economic challenges.

“We have faced and are still grappling with serious economic turmoil and contraction of global economic growth,” Fields observed.

He pointed out that at the beginning of the 2008 despite hopes that the Caribbean would not be badly affected; the region did not escape the pains of the economic downturn.

“New economic measures and regulations are being implemented across the region which should bring early economic recovery,” the Chairman opined.

Field highlighted that Demerara Mutual’s operations were not harmed much since the company was not exposed to institutions that went under such as, CLICO and the Stanford Group.

In this light, the Chairman said, “Demerara Mutual continues to operate within the parameters set by the Insurance Regulators in all territories.”

Fields also said the company will do all in its power to remain viable and to protect the finances and assets of its patrons.

Demerara Mutual Assurance Society is one of the main providers of financial investment securities in Guyana and in the Caribbean islands of St. Lucia, St. Vincent and the Grenadines, and Grenada.

The categories of protection offered by the company are embedded in the insurance staples of Life, Motor and Fire.

The company also manages individual mortgages as well as handles Group Protection which includes: Pension Schemes, Health Schemes, Group Endowment, and Group Creditor Schemes.

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