Home' Trinidad and Tobago Guardian : August 16th 2015 Contents AUGUST 16 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
Declines in the prices of gold,
crude oil and alumina
restrained the growth in the
Surinamese economy to 3.3
per cent in 2014 from four
per cent in 2013.
In the insurance sector, effective October
9, 2014, a new National Basic Health Insurance
Act came into force. On December 9, 2014 a
new General Pensions Act 2014 came into
being; early indications are that implementation
of this second act could be problematic for
Perhaps, locally, after next month s general
elections, we will see speedier progress in our
long delayed financial legislative agenda?
The year 2014 marked the first full year of
operations for Assuria s Trinidad subsidiary,
Gulf Insurance Ltd.
Let us now review Assuria s results for the
year ended December 2014.
Changes in financial position
Total assets rose from SR$855.8 million last
December to SR$978.6 million (TT$1.86 billion)
as at December 31, 2014, reflecting an increase
of 14.3 per cent.
Long-term assets rose to SR$853 million
from SR$766 million, or by 11.4 per cent. The
largest component, financial investments,
ended 2014 at SR$569 million, representing
an increase of 10.6 per cent over the 2013 bal-
ance of SR$514.3 million.
A major component, term deposits, com-
prised SR$253.8 million (2013: SR$237.6 mil-
lion). Also, mortgages grew by 22.4 per cent,
moving from 2013 s SR$133.3 million to
Its investment in non-consolidated partic-
ipations represents its ownership of De Suri-
naamsche Bank NV (DSB), which had a year-
end value of SR$155.8 million (2013: SR$127.4
Formerly, Assuria s ownership was 49 per
cent. Resulting from a December 2014/ January
2015 rights issue, in which Assuria did not
participate, its ownership fell to 46 per cent
then to 44 per cent.
Weak equity market conditions in Suriname
make it very difficult for Assuria to dispose
of its stake in DSB, as required by the Central
Bank. Perhaps, a strong regional bank might
have an interest?
The value of goodwill declined to SR$2.78
million from 2013 s SR$3.3 million; this related
solely to the 2013 purchase of Gulf Insurance
Ltd. The reduction reflected a refund on the
purchase price of TT$1 million (SR$0.518k);
this was a correction to the deferred tax posi-
tion of Gulf as at the acquisition balance sheet
Investment properties consist of the value
of real estate projects, which were developed
by its joint venture with DSB; partly due to
new regulations coming into force, no new
projects will be initiated. Year-end values
moved from SR$60.5 million in 2013 to SR$63.7
The most significant short-term asset was
cash and equivalents, which climbed by almost
31 per cent to SR$64.1 million from SR$49
million. None of its cash is restricted and its
bank balance was SR$50.3 million (2013:
Total liabilities rose by 11 per cent to
SR$619.4 million from SR$558.1 million.
The largest component, premium and tech-
nical reserves, closed 2014 at SR$496.3 million
from SR$458.6 million. Of this total, SR$408
million related to life insurance (2013: SR$367.5
million) while its general insurance segment
accounted for SR$88.3 million (2013: SR$91.1
Other liabilities and accruals rose by 38.3
per cent to SR$68.1 million from SR$49.3 mil-
lion. The largest component, at SR$39 million,
related to its real estate joint venture with DSB
(2013: SR$34.3 million). Another significant
element was dividend and bonus of DS$10.4
million (2013: SR$2.7 million).
Liabilities arising from insurance operations
rose from SR$11.7 million to last year s SR$14.7
million, reflecting an increase of 25.8 per cent.
Total group equity advanced to SR$359.2
million from the 2013 year-end balance of
SR$297.8 million. The minority interests, most-
ly the 25 per cent stake in its Guyanese oper-
ations, which is held by Crown Investment
Inc; the value of this was about SR$0.6 million
for both periods.
The major contributor to this increase was
reserves, which advanced to SR$358 million
from SR$296.5 million. The current year s
profit added SR$46 million while the reval-
uation of its joint venture participations con-
tributed a further SR$28 million while other
adjustments made up the difference.
With 6,553,801 shares outstanding, each
share has a book value of SR$54.72 (December
Revenues and surplus
Total revenues advanced by 7.1 per cent to
SR$257.3 million from the comparative 2013
outturn of SR$240.2 million.
The largest element, net premium income,
came in at SR$192 million; this was 4.2 per
cent greater than the SR$184.3 million recorded
for 2013. In 2013, the premium tax was treated
as an operating expense while, in 2014, it is
deducted from the gross figure.
Strong increases were registered in both
Guyana and T&T while growth in Suriname
was less robust, although that market still
accounted for the 85 per cent of the total.
When considering the gross premiums
(before reinsurance), Suriname s share falls to
75 per cent while Trinidad accounts for 22 per
cent and Guyana contributes three per cent.
Realised investment income rose by almost
SR$7 million (16.8 per cent) to SR$48.2 million
from SR$41.3 million; this represented income
from term deposits, mortgages, loans and
Unrealised investment income advanced by
37.3 per cent to SR$13.9 million from the 2013
base of SR$10.2 million.
On the other hand, other income fell to
SR$3.17 million from SR$4.5 million. There
was a huge decline in rental property, which
fell to SR$879,000 from SR$2.33 million in
In contrast, other activities generated SR$4
million from less than SR$300,000. In addi-
tion, there was an adverse exchange rate dif-
ference of SR$2.6 million; in 2013, this line
item generated a positive SR$846,000.
Total expenses rose by less than two per
cent to SR$207.9 million from 2013 s restated
Claims and surrenders rose to SR$78.2 mil-
lion from SR$71.7 million. Here, the life seg-
ment rose by 18 per cent to SR$19 million
from SR$16.1 million. The non-life segment
increased from SR$55.6 million to SR$59.2
million or by 6.5 per cent.
On the other hand, policy liabilities fell to
SR$38.7 million from the restated 2013 figure
of SR$51.9 million. This reduction was con-
centrated at the life insurance segment (SR$10.5
million) and at Gulf (SR$5.1 million).
The only other decline was observed with
profit sharing and discounts, which came in
at SR$9.9 million from the previous year s
Operating expenses rose by17.4 per cent to
SR$77.3 million from SR$65.9 million. This
change included a 22 per cent increase in staff
costs, and 13 per cent uplift in other costs and
a 15 per cent rise in acquisition costs.
The pre-tax result came in at SR$49.4 mil-
lion, which was 37 per cent greater than the
restated 2013 figure of SR$36.1 million. After
income taxes and minority interest, the profit
attributable to shareholders registered at
SR$45.9 million versus SR$34.5 million for
These results translated into 2014 EPS of
SR$7.00 compared with SR$5.26 for 2013.
Country and segment performance
The general insurance premiums from Gulf
provided much of the overall increase in pre-
miums for the year.
The bulk of the other income streams were
provided by both realised and unrealised invest-
ment income, which is concentrated at the
Suriname head office.
In Guyana, the general insurance division
continues to do well. This division recorded
a profit in 2014 of SR$260,000; this result
represents a huge improvement over the 2013
loss of SR$370,000.
Its life insurance segment produced premium
income of SR$415,000 versus SR$163,000 in
2013. Despite this, the company produced a
larger loss of SR$686,000 (2013: SR$531,000
loss). The two shareholders injected an addi-
tional G$66.25 million (SR$1.071 million) into
The signing of a new pension contract with
Guyana Water Inc on January 1, 2015 should
help improve the current year s results.
The Trinidad operations produced good
results at both the top and bottom lines. Unfor-
tunately, significant adjustments had to be
made to its 2013 results. These related to the
calculation of technical reserves, value of assets
purchased and goodwill.
Dividends and share price
The Suriname Stock market is not very
active. Even so, Assuria s shares increased from
SR$95.75 as at December 2013 to SR$105.00
as at last December.
Over the past six years, Assuria has paid
increasing dividends starting at SR$1.00 back
in 2010. At that time, Assuria s share price
was SR$30.00. Total dividends paid with
respect to its 2014 fiscal period was SR$2.28
compared with SR$2.00 for 2013.
Based on the dividend of SR$2.28 and a
share price of SR$105.00, the yield is 2.17 per
Subsequent events & prospects
In January 2015, Assuria completed the pur-
chase of 77 per cent of another Trinidad insur-
er, Mega Insurance, now renamed Assuria Life
In March 2015, Assuria increased its stake
by subscribing to 150 million newly-issued
shares at a cost of US$3.5 million; this action
boosted its ownership to 97 per cent.
Given the weak equity markets in the South-
ern Caribbean, is there an opportunity for the
TTSE to develop a junior market for companies
from Suriname, Guyana and the Eastern
Caribbean to become listed on the local
exchange, which, prior to the current IPO, has
been starved for new issues for a long time?
Alternatively, can a local mutual fund create
a special fund that invests in such entities?
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