President (Family Guardian Insurance)

The first things that an investor looks for prior to investing in a foreign country are a trustworthy lawyer, bank and insurance company. What does the Bahamian financial system offer to assure investors that they are coming in to a country with a solid financial sector and within it a reliable insurance industry?

If we look at The Bahamas historically, we have always been recognized as having one of the more stable political and economic bases within the region. Our local banking sector has enjoyed long-term success, with the presence of major Canadian banks such as The Royal Bank of Canada, The Bank of Nova Scotia (Scotiabank) and The Canadian Imperial Bank of Commerce (CIBC FirstCaribbean). These banks were the basis of our banking sector many years ago and they remain an integral part of our financial landscape today. Additionally, we have US based banks operating out of our jurisdiction, which I believe provides investors with the familiarity they need as they expand their operations into The Bahamas.

Our insurance sector is a vibrant mix of local, regional and international players, with local companies dominating the landscape.  Access to coverage, whether related to life, health or property, is easily attainable, with a clear delineation between the intermediary and the insurer.  While the market is heavily controlled by local companies, the majority of the risks related to the insurance market are carried by external, highly rated reinsurers that potential investors would already be familiar with.

FamGuard Corporation is a holding company that promises to help its clients manage risk and build wealth by offering a wide variety of services such as life and health coverage, property protection, or building investment portfolios. What would you say are the main reasons behind the company’s success over the five decades?

FamGuard as a holding company has as its major subsidiary Family Guardian Insurance Company, which is our life and health insurance arm. As we celebrate Family Guardian’s 50^th anniversary throughout 2015, we owe our success to the unwavering support of our clientele and to the loyalty, strength and capability of our team of agents and employees. Family Guardian grew out of industrial insurance. Our focus was to provide security to an underserved market, our low to low-middle income population. We were able to fill a niche in the marketplace and our success in this market continues today.

Over the years we have been able to leverage that business, moving into ordinary life sales, annuities and major medical products, basically expanding our offerings in tandem with the improvement of the financial status of the local population. We were able to expand our suite of products to be able to provide service to the entire local market but at the same time maintaining the market that brought us into being. By continuing to service both markets, we have been able to mitigate our exposure to short-term economic shocks.

FamGuard has been able to garner a sizeable share of the market. Competing with international insurers has enabled us to hone our skills and to effectively compete with companies with considerably more capital. Over the past eight years we have expanded further to cover the needs of our clientele. We re-launched our property & casualty insurance agency, FG Insurance Agents & Brokers, and established local dollar and international funds through FG Financial while also launching a brokerage and advisory company, FG Capital Markets, to offer risk-based products to our existing clients as they attempted to amplify and diversify their financial portfolios. In an attempt to stay true to our roots, we developed those particular entities to reach out again to an underserved market. To mobilize the Bahamian public to be more engaged in securing their financial future, we designed our products for ease of access. We are extremely pleased at the level of participation that we have seen since the inception of these wealth management products. With the establishment of these additional subsidiaries, we can now boast of being a true multi-line company with the ability to provide an array of insurance and wealth accumulation products to our clientele.

What would you say really sets Family Guardian Insurance Company apart from your competitors and how do you want Family Guardian to be perceived?

I think that even though we have grown substantially over the years we are still seen to be a “family” based company. We are large enough to make a difference but small enough to still have that personal touch. Our clients, and the community at large, see Family Guardian as a company of “community” as we are integrally involved with the various communities in which we operate, whether by investing financially or through the contribution of time and talent.

Innovation is critical for the long-term survival of any company. How exactly are you incorporating innovation into your work in order to remain relevant and competitive?

We are in the process of revitalizing the way in which we service our market, with a significant push toward technological improvements, both in the field as well as at our back office locations. We expect to leverage our investment in technology to allow for improved generation of new business, the improvement of premium collections, as well as the timely processing of insurance claims.

We are continuously looking at our application systems across the company. We are in the midst of converting our health business platform, which is timely given the fact that we are moving closer to the implementation of National Health Insurance. We are also reviewing our current application system for our ordinary life business and we are just about complete with converting our wealth management application. There is a constant push to improve our technology in order to provide more efficient service to our customer base.

The government is currently developing National Health Insurance, which is due to be implemented by January next year. Mr. Burrows, you have previously stated that this is “too much too soon”. How are you going to transform this challenge into a business opportunity?

We believe that if this is implemented correctly, it will ultimately help us to expand our market. When we look at the current population there is a large segment with no health insurance coverage. Should these persons be mandated to obtain coverage through private health insurers, there is an opportunity for us to be able to expand our reach. One of the important things the debate around National Health Insurance has done is to bring the issue of healthcare costs and services to the fore. Our population is afflicted with a handful of specific lifestyle diseases. The fact that it is being discussed should help to bring about more recommendations and action for the solution of these issues.

The FamGuard Group has FG Capital Markets for investors who are seeking to start or grow their investment portfolio. Given this is a highly competitive market, what’s your value proposition within the sector?

We established our wealth management division in 2008 having looked at our life and health client base and recognizing that there was substantial untapped potential for us to offer brokerage and advisory services to our existing clientele. In addition, there are benefits that accrue to Family Guardian by having a brokerage and advisory arm built into our group of companies. Insurance companies need to invest in long-term assets in order to properly match the corresponding liabilities of our business. Given the size of the Bahamas’ investment market there are insufficient fixed rate investments that we would be able to tap into locally that meet the tenor that we need. Having a brokerage company allows us to access international investments in limited amounts based on various government initiatives implemented over the years.

FamGuard is a publicly traded company listed on the Bahamas International Securities Exchange. How do you assure your stakeholders that you are maximizing their dividends?

The Bahamian investing public has primarily been more of a dividend-based market. At FamGuard, we continue to seek improvements in our operating efficiency and to increase our revenue base to provide an improving level of return to our shareholders. In the past, shareholders have been comfortable as long as they were receiving a dividend return that matched or exceeded the local term deposit rates. This is now beginning to shift as the market has become more educated on the requirements of a true capital market. While there has been a substantial buy and hold mentality locally, there is a shift to diversification of portfolios and a focus on total returns and not just dividends. We still feel that much more investor education is needed and the local publicly traded companies, the Bahamas International Securities Exchange, and the Securities Commission of the Bahamas still have quite a bit of work ahead of us in order to promote the local stock market and the active trading of shares of public companies.

FamGuard Corporation has established a presence in Nassau, Grand Bahamas, Abaco, Eleuthera, & Exuma. Does FamGuard Corporation have any plans to expand regionally or internationally?

In our early years, Family Guardian held offices at locations throughout the Caribbean.  As the political environment changed in some of those locations, we retrenched to focus on expansion of our operations at home.

There is always the possibility and opportunity for us to move abroad but we feel that there is still work to be done here locally prior to us looking at international markets. Obviously we have a relationship with Sagicor Financial and the expectation is that we would look to leverage that relationship as we consider expansion. 

As you just said, FamGuard has, for example, formed a strategic alliance with Sagicor Financial Corporation, a well-known full service financial institution in the Caribbean. Are you currently seeking more joint ventures and if so, what kind of partners are you looking to attract?

At this time, we do not intend to increase our strategic partnership with any other entity; however, we are always on the lookout for acquiring or merging with companies that fit our profile whether in the local market or regionally.

Corporate social responsibility is an invaluable way for companies to give back to the communities in which they work. Your company contributes to the local community through education, sports and health. What initiatives are you currently, or have you been, involved in that you are most proud of?

Our greatest achievement has been the establishment of our annual Founders Day activity, which has been in play now for five years. In the past, our company engaged in a fun day for our employees. It was recommended instead that we devote a day to giving back to the less fortunate in our midst, joining with various charitable organizations throughout The Bahamas to spend time with underprivileged children, the elderly, or children with various disabilities. We now do this every year in honor of the three founding fathers of our company. The amount of joy and satisfaction that you see in the eyes of those we assist is incredible; however, it pales in comparison to the level of satisfaction obtained by our staff. Engaging in such events gives you an opportunity to reflect on the benefits you have and helps you to be even more thankful for them.

In the area of education, FamGuard has a long-standing investment in a scholarship program with the College Of The Bahamas where we provide an annual grant for highly motivated students with financial challenges to continue their education.  Our aim is to encourage these students to excel in various degrees which will benefit the country in the long run.

As you know HBR focuses on leadership. Mr. Burrows, last year you were appointed President of both Family Guardian Insurance Company and FamGuard Corporation, boasting 23 years of experience in the insurance industry. Given this report will be launched early next year, what is your vision for FamGuard for the next six months?

My vision for the company over the next six months is to transform the level of communication within the organization. We currently operate several different companies under the umbrella of the FamGuard group. Additionally, as is the case in all sales organizations, there is some divergence in culture among the sales and support staff. My vision is to increase the level of collaboration amongst the various companies and the sales and support segments to enable the company to gain additional leverage. The removal of silos and the elevation of collaboration amongst those divisions are critical to our success. Improvement in these areas will come about through active engagement on both sides and the use of technology to reduce barriers.  We are confident of our success in that regard.

As you know, the readers of Harvard Business Review include many of the world’s most influential business and political leaders. As President of FamGuard Corporation, what message would you like to send them about The Bahamas and the company?

From a geographical standpoint there is no better location. When we look at our proximity to the United States, ease of access (airlift and seaports) as well as our significant level of natural resources, there are substantial opportunities for establishing business within The Bahamas.

We boast a stable political environment and a strong banking and financial services market. For anyone interested in investing in The Bahamas, there is no better time.

FamGuard is here to provide for the needs of both local and international clients alike. We are a small but dynamic company with the ability to provide first-class levels of service rivaling that of any of our international counterparts. We have an experienced and highly educated group of professionals responsible for the day-to-day running of the organization and a very diverse but highly qualified board of directors. We have been a staple in the local market for 50 years and we anticipate that 50 years from now, FamGuard will still be thriving. We look forward to the opportunity to serve you.