Guardian Holdings Limited (GHL) is making strategic moves to cut expenses, reduce leverage, and reallocate capital across the group, in line with a new mandate from its parent company NCB Financial Group Limited (NCBFG). The insurance conglomerate has already cut TT$26 million in non-core expenses in the first half of the year through streamlining operations and selling non-core assets, such as jets. This cost-cutting initiative is part of a broader goal to improve the cost-to-income ratio.
GHL is also focused on deleveraging the business, with a target to reduce its leverage ratio from 86 per cent to about 50 per cent by 2028. This will result in lower interest expenses, higher returns on capital, and more capital available for dividends to shareholders. The company is looking to sell non-core assets and pay down debt to achieve this objective.
In terms of product innovation, GHL is working on introducing new products like cyber risk insurance, led by data scientists using machine learning to better segment clients in the property and casualty business. The company is also discontinuing some insurance products to focus on core revenue-generating areas while ensuring customers are not adversely impacted.
Financially, GHL saw growth in insurance revenue and net insurance revenue in the second quarter, with consolidated net profit increasing by 36 per cent. For the overall six months, GHL reported a six per cent increase in consolidated net profit, with total assets at TT$36.14 billion and total liabilities at TT$31.94 billion.
GHL’s stock price has seen a decline year-to-date, but the company remains committed to increasing the breadth of its shareholding. The top ten largest shareholders currently own 77.53 per cent of the company’s issued shares, leaving a small free float of shares for trading. GHL will pay a dividend of TT$0.23 to shareholders on August 29, with a 12-month dividend yield of 6.08 per cent.
Furthermore, GHL is undertaking a restructuring to comply with financial holding company regulations, creating a subsidiary to hold regulated entities and another holding company for non-regulated entities. This process involves segregating over 60 subsidiaries across more than 20 jurisdictions and collaborating with regulators to ensure compliance and efficiency.
Overall, GHL’s strategic initiatives aim to strengthen its financial position, improve operational efficiency, and drive growth in core revenue-generating areas. The company’s focus on cost management, leveraging technology, and product innovation positions it for long-term success in the insurance industry.
