-GTM blames global economic challenges

GLOBAL economic challenges which Guyana has not been able to cushion successfully have also resulted in a reduced demand for life insurance, which has caused the profits of the Guyana and Trinidad Mutual Life Insurance Company (GTM) to be reduced by $235M.
This is according to Chairman of the Board of Directors, R. L. Singh, during the company’s 92nd Annual General Meeting which was held on Tuesday at the Georgetown Club. Singh explained that in 2016, the company made a profit of $83M, compared to $329M in 2015. He said that despite this decline, the company was able to make a surplus of revenue over expenditure of $352M before adjustment for the movement in actuarial liabilities, compared to $587M in 2015.

The increase in actuarial liabilities for the year 2016 totalled $269.7M compared to $257.9M in 2015. The chairman, who addressed other directors and stakeholders at the short meeting, noted that as with most life insurance companies across the region, 2016 was a challenging year for the company, even though the individual life market is largely untapped.

He said that based on the findings of consultants from the International Monetary Fund (IMF) and World Bank, there is a low penetration for individual life insurance across the Organisation of Eastern Caribbean States (OECS) and Guyana, with just under five per cent and three per cent respectively.

“This decline in demand for life insurance is due mainly to the economic challenges that have beset countries across the region,” Singh reasoned. Nevertheless, he was pleased to announce that the company performed “fairly well” in 2016, and this was credited to its solid core of insurance advisors.

In this regard, the chairman revealed that the company recorded a growth in gross premiums of $97.27M or six per cent over the previous year. He said that of this sum, $43.24M or 44.45 per cent emanated from Guyana, while $40.31M or 41.44 per cent came from St Lucia, since the company is a regional one.

Speaking specifically of Guyana, Singh related that over a decade ago, the other Caribbean branches were outperforming Guyana’s operations one year after the next. However, he was keen to note that this is no longer the case, as GTM Guyana has recorded an average annual growth of approximately 13.22 per cent in gross premiums over a period of five years.

He pointed out too, that for the financial year 2016, Guyana recorded a surplus of $227.84M and net profit of $26.18M following deduction for movement in actuarial liabilities. Despite this performance, Singh remains optimistic, sharing with stakeholders that “we are confident that notwithstanding external challenges, your company’s Guyana operations will continue to improve its production, loss and expenditure ratios, and probability.”

He said that this is especially important given the implications of the pending Eastern Caribbean Currency Union Legislation that requires incorporation of a separate company in the Eastern Caribbean, thus splitting the company from its Eastern Caribbean operations in the near future.
The meeting also saw the re-election of Singh as Chairman of the Board for 2017, the re-election of the board of directors, the adoption of the 2016 Annual Report, the re-election of the retiring auditor and agreements on remuneration packages.

Staff who excelled in their performance for 2016 were also awarded plaques and other prizes.