Baillie Gifford Emerging Market Fund - Class K · NASDAQ:BGKEX
Baillie Gifford Emerging Market Fund - Class K — Polar Capital Global Insurance Fund — Investor Presentation (January 2025)
59 slides from Baillie Gifford Emerging Market Fund - Class K's investor presentation, January 2025
Slide 1: Polar Capital Global Insurance Fund
Polar Capital Global Insurance Fund SFDR Classification Article 8 January 2025 Dominic Evans, Fund Manager polarcapitalfunds.com This is a marketing communication This presentation This presentation isisfor foruse usewith withnon-US professional non-US investors professional only.only. Please refer
Slide 2: Agenda
Agenda 1 Global Insurance Fund; The First 25 Years 2 Book Value Growth Outlook And Valuation Update 3 Market Conditions And Fund Positioning 4 Artificial Intelligence And Insurance 5 Summary This presentation is for use with non-US professional investors only. Please refer to the Important Informati
Slide 3: Global Insurance Fund; The First 25 Years
Global Insurance Fund; The First 25 Years This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important Information a
Slide 4: 26 Year CAGR Of 10.5% With Experienced Team
26 Year CAGR Of 10.5% With Experienced Team 1976 19 October 1998 2001 September 2010 2012 Alec Foster joins Hiscox Fund Launch Nick Martin Rebranded Dominic Evans Group Investment Officer and managed Hiscox Insurance joins Hiscox Polar Capital joins Polar Capital Members’ Agency for 22 years Portfol
Slide 5: Continuing To Live In The Age Of Risk
Continuing To Live In The “Age Of Risk” • We will continue to live in an “Age of Risk” • The ability to transfer risk will continue to gain in importance; insurance is a key tool in managing unwanted volatility and providing societal resilience • The risks that we are facing are broad, ever changing
Slide 6: Book Value Growth Outlook and Valuation Update
Book Value Growth Outlook and Valuation Update This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important Informat
Slide 7: A Closer Look At The Last 3 Years Of Performance
A Closer Look At The Last 3 Years Of Performance FY22 FY23 FY24 2 years FY23/FY24 Estimated Book Value (“BV”) Growth -3% 21% 19% 44% Expectation at start of year [10%+] [16%+] [16%+] Price to Book (“P/B”) multiple change 20% -16% 6% -13% Fund Price to Book at end of year [190%] [170%] [180%] Fund Pe
Slide 8: Fund Performance Tracks Company Book Value Growth Over The Long Term
Fund Performance Tracks Company Book Value Growth Over The Long Term • Share prices historically track book value growth and dividends • To the end of 2024, both the Fund price and growth in book value and dividends have compounded at c10.5-11% per annum1 • Book value growth has been resilient throu
Slide 9: How Non-Life Insurers Make Money
How Non-Life Insurers Make Money • Over time the returns of the Fund will likely reflect the underlying book value growth of our companies • For every company in the portfolio we project forward the next 12 months of expected book value growth, which is revisited at least once a quarter (usually at
Slide 10: Excellent Underwriting Market And Rise In Short-Term Bond Yields Has Increased Earnings Power
Excellent Underwriting Market And Rise In Short-Term Bond Yields In 2022 Has Materially Increased Earnings Power • Insurance is a lagged business. Contracts written today typically take 12 months to be recognised from a revenue perspective and underwriting profits take even longer to earn through. T
Slide 11: Cash On Cash Returns Materially Higher Than 8% Average Over 25+ Years
“Cash On Cash” Returns Materially Higher Than 8% Average Over 25+ Years Of The Fund US Industry and Fund price to book1 “Cash on cash” return2 (calculated as expected BV growth divided by price to book) Fund P/B of c180% vs 240% 11.0% 17.5% BV growth = 9.7% 220% 10.5% 200% 10.0% 9.5% 180% 9.0% 160%
Slide 12: Market Conditions and Fund Positioning
Market Conditions and Fund Positioning This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important Information at t
Slide 13: A Diversified Underwriting Portfolio
A Diversified Underwriting Portfolio Indicative underwriting mix Personal Auto 10% Broker Personal Insurance/ Retail Homeowners 3% Insurance/ Retail = 18% Personal Accident & Health 6% Other Workers’ Compensation 2% Primary Mortgage Insurance 7% Commercial Commercial Multi-Peril 3% Insurance Commerc
Slide 14: Strong Underwriting Market Conditions Continue
Strong Underwriting Market Conditions Continue • The Marsh Global Pricing Index has increased c60% since 2018 restoring underwriting margins. Premium rate rises are averaging mid single digit across Fund holdings given our bias to specialty risk (E&S market) and the US market (c60% Fund premium) • L
Slide 15: Specialty Underwriting Markets Growing Strongly
Specialty Underwriting Markets Growing Strongly • As risk becomes more complex there is Annual E&S Premium Growth (2011 to H1-2024)1 growing demand for bespoke, tailored and 180% specialist underwriting which is resulting 160% 10% 14% in more insurance being written in Excess 140% 20% and Surplus Li
Slide 16: Catastrophe Reinsurance Pricing Down Modestly From 2024 Peak
Catastrophe Reinsurance Pricing Down Modestly From 2024 Peak But Prospective Profitability Remains Excellent Risk-adjusted property-catastrophe reinsurance rate-on-line index at 1 January1 • Reinsurance broker Howden estimated overall risk-adjusted property-catastrophe pricing was down 8% on average
Slide 17: Artificial Intelligence and Insurance
Artificial Intelligence and Insurance This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important Information at th
Slide 18: Some Fun AI Facts
Some Fun AI Facts Fact 1 – Travelers operates one of the largest drone fleets in America and the largest in the insurance industry with over 700 FAA certified drone pilots • Travelers’ geospatial insights are key to their market leading claims solutions. Leveraging 45bn claims data attributes as wel
Slide 19: Summary - A Fund With Strong Returns And Low Volatility
Summary - A Fund With Strong Returns And Low Volatility This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important
Slide 20: Polar Capital Global Insurance Vs MSCI Global Sectors
Polar Capital Global Insurance Vs MSCI Global Sectors Sharpe Ratio Rank 3YR 5YR 10YR 15YR 20YR 1 Insurance IT IT S&P 500 IT 2 Polar Capital Global Insurance S&P 500 S&P 500 IT S&P 500 Consistently strong 3 4 Energy S&P 500 MSCI World Insurance Polar Capital Global Insurance MSCI World Polar Capital
Slide 21: ESG Overview
ESG Overview “Climate action is the 21st century’s greatest opportunity to drive forward all the Sustainable Development Goals” - Secretary-General of the UN1 ESG rating distribution – proprietary fund ESG scoring2 • Insurance is one of the few industries that is relevant to all of the 17 UN Sustain
Slide 22: Summary
Summary Fund vs broader markets since inception1 • 25+ year track record 4% 3% • Sector performance typically counter-cyclical, offering investors diversification 2% 1% • We expect mid-teens book value growth to drive investor returns 0% -1% • Valuations attractive and supported by continued share b
Slide 23: Q4/FY 2024
Q4/FY 2024 This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important Information at the end of this presentation.
Slide 24: Projected FY24 Book Value Growth On Track To Exceed 16%+ Estimate
Projected FY24 Book Value Growth On Track To Comfortably Exceed Our 16%+ Estimate For The Year • In 4Q24, GBP R Class (Acc) shares of the Fund returned 3.5% versus 3.4% for the MSCI World Insurance Index benchmark, 6.9% for the MSCI World (both net total return GBP), -0.4% for the FTSE All Share and
Slide 25: Appendix
Appendix This presentation This presentation is is for for use use with with non-US non-US professional professional investors investors only. only. Please refer to the Important Information at the end of this presentation. Please refer to the Important Information at the end of this presentation.
Slide 26: 2023 Hard Reset Led To Step Change In Reinsurer Profitability
2023 “Hard Reset” Led To A Step Change In Reinsurer Profitability Which Is Expected To Persist For The Medium Term Reinsurer returns projected to remain strong1 • Reinsurers have returned to their historical business model of balance sheet protectors • Reinsurance broker Guy Carpenter estimated in 2
Slide 27: Great Companies Built Through The Flywheel Effect
Great Companies Built Through The Flywheel Effect AI can drive enhanced capabilities, improved underwriting and reduced costs The Insurance AI Flywheel Distribution and Marketing Underwriting and Risk Management • Improved risk analysis of clients to facilitate better • New data sets leveraging unst
Slide 28: Attractive Returns Over The Long Term
Attractive Returns Over The Long Term Global Insurance MSCI Daily Net MSCI Daily Net FTSE All-Share S&P 500 Global Insurance MSCI Daily Net MSCI Daily Net FTSE All-Share S&P 500 TR World TR World Fund TR World Index TR Index TR Index Fund TR World Index TR Index TR Index Insurance Index Insurance In
Slide 29: Polar Capital Global Insurance Fund
Polar Capital Global Insurance Fund Sector Exposure Fund Top 10 Holdings Fund Arch Capital 9.1% Commercial 46.8% RenaissanceRe Holdings 9.0% Retail 19.3% Chubb 6.4% Marsh McLennan 5.9% Reinsurance 13.6% WR Berkley 5.4% Insurance Brokers 10.2% Essent Group 4.6% Fairfax Financial Holdings 4.4% Life an
Slide 30: Fund Summary
Fund Summary • Only European fund dedicated to investing in the global insurance industry • Structure: Irish-domiciled UCITS • Launch date: 27 May 2011 (Hiscox Insurance Portfolio Fund launched 19 October 1998) • 25+ year track record • £2.5 billion AUM (31 December 2024) • Prospective yield: c2.00
Slide 31: Polar Capital Overview
Polar Capital Overview Established in 2001 Technology Healthcare European Long/Short £22.7bn (US$30.4bn) AUM 3 Funds 6 Funds 2 Funds3 £9,713m £3,632m £104m 194 employees $13,017m $4,867m $139m Admitted to trading on AIM in February 2007 Emerging Markets and Asia Financials Insurance A specialist, in
Slide 32: Experienced Investment Team
Experienced Investment Team Nick Martin – Lead Fund Manager Nick Martin joined Polar Capital in September 2010 and is manager of the Polar Capital Global Insurance Fund (previously the Hiscox Insurance Portfolio Fund). He has 26 years’ experience in the financial services industry. The Fund was foun
Slide 33: Fund Performance
Fund Performance NAV Performance 1300% 1100% 900% 700% 500% 300% 100% -100% Oct-98 Aug-00 Jun-02 May-04 Mar-06 Feb-08 Dec-09 Nov-11 Sep-13 Aug-15 Jun-17 May-19 Mar-21 Feb-23 Dec-24 Polar Capital Global Insurance Fund (£) MSCI Daily Net TR World Index (£) MSCI Daily Net TR World Insurance Index (£) 1
Slide 34: Fund Performance GBP vs USD
Fund Performance GBP vs USD NAV Performance 1400% Ann. SI 1200% Polar Capital Global Insurance Fund (£) 10.3% 1000% Polar Capital Global Insurance Fund ($) 9.0% 800% 600% 400% 200% 0% -200% Polar Capital Global Insurance Fund ($) Polar Capital Global Insurance (£) Past performance is not indicative
Slide 35: A Diversified Underwriting Portfolio
A Diversified Underwriting Portfolio Indicative underwriting mix 2016 2017 2018 2019 2020 2021 2022 2023 Auto 13% 13% 12% 11% 8% 8% 8% 10% Personal Insurance/Retail = 18% Homeowners 5% 5% 5% 3% 4% 3% 3% 3% Personal Accident & Health 2% 2% 2% 4% 4% 4% 6% 6% Workers’ Compensation 3% 4% 4% 3% 3% 3% 3%
Slide 36: Global Underwriting Market Pricing Trends
Global Underwriting Market Pricing Trends • Insurance broker Marsh’s Global Pricing Index has shown c60% compounded rate rises since 2018 significantly ahead of loss cost inflation and therefore leading to material underwriting margin expansion Marsh Global Insurance composite pricing change1 24% 22
Slide 37: Low Risk Look Through Investment Portfolio
Low Risk Look Through Investment Portfolio • Cash and invested assets represent c250% of shareholders’ equity and this investment leverage is materially lower than you typically see in banks and life insurers. Our company portfolios are diversified, low risk and short duration (2-3 years) as they ne
Slide 38: Travelers - A Case Study In Right Sizing Your Balance Sheet
Travelers - A Case Study In Right Sizing Your Balance Sheet • US$55bn1 market-cap US focused primary insurer Key Figures1 2006 2023 CAGR • High-quality company with scale, a strong brand, technical and analytical Market Capitalisation $37bn $44bn 1% expertise with a best-in-class management team • F
Slide 39: Arch Capital (ACGL US) 9.1% of Fund
Arch Capital (ACGL US) 9.1% of Fund (31 December 2024) • US$35bn market cap Bermuda based (re)insurer formed in 2001 (31 Annualised growth rate of 16% from March 20021 December 2024) 50 46.94 45 • Arch consolidates position in profitable mortgage insurance market with 40 acquisition of UGC from AIG
Slide 40: Marsh McLennan (MMC US) 5.9% of Fund
Marsh McLennan (MMC US) 5.9% of Fund (31 December 2024) Total MMC 2022 Revenue: $20.8 billion Canada • MMC is the largest global insurance broker with c85,000 employees operating from 500 offices in over 130 countries Latam & Carib 4% 4% • Advises on over $125bn of global insurance premiums • Consis
Slide 41: The AI Opportunity
The AI Opportunity We expect AI capability will further augment underwriters’ toolkits and widen the already significant dispersion of quality across the sector How can AI benefit the Insurance Industry? Improving underwriting Enhance claims processes Reduce expenses • Generate insights from large c
Slide 42: Artificial Intelligence Deep Dive Case Study – Travelers
Artificial Intelligence Deep Dive Case Study – Travelers “While we are already seeing the benefits of our investments in AI reflected in our results, the full impact of the capabilities we are developing and others on our roadmap are still ahead of us…. Expertise, resources, data, scale and executio
Slide 43: Global P&C Industry Expected To Increase By $2.5trn Over The Next 20 Years
Global P&C Industry Expected To Increase By $2.5trn Over The Next 20 Years Motor Property Liability Other Total P&C risk pool Risk pool 2020E (USD billion) 766 450 214 378 1,808 2040F USD 4.3 trillion % of total 42% 25% 12% 21% 100% Risk pool 2040F (USD billion) 1,4021 1,2731 583 1,059 4,316 2020E %
Slide 44: Profitability Of US E&S Industry Vs Total US P&C Industry
Profitability Of US E&S Industry Vs Total US P&C Industry: 10 Year Combined Ratio • The specialty “E&S” market that many Fund holdings operate in has performed significantly better than the total insurance industry over time • Following several years of rising rates during the last insurance pricing
Slide 45: Catastrophe Bond Pricing
Catastrophe Bond Pricing Past performance is not indicative or a guarantee of future returns. Source: Lane Financial, Quarterly Market Performance Report, 31 December 2021. Some information contained herein has been obtained from third party sources and has not been independently verified by Polar C
Slide 46: Industry Catastrophe Losses; US Hurricanes In Context
Industry Catastrophe Losses; US Hurricanes In Context Global natural catastrophes – insured losses (current US$bn) • 2023 Hurricane season resulted in limited insured losses given Hurricane 160 150 Idalia impacted sparsely populated areas of North West Florida 140 134 c.130-140 126 130 120 120 • Act
Slide 47: P&C Protection Gap Remains Significant
P&C Protection Gap Remains Significant Overall and insured losses in US$ US$ Billion 500 Relevant natural disasters 450 worldwide 2000 - 2021 400 350 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023 Insu
Slide 48: Selected Slides from ESG and Sustainability Insights
Please click the following link to view our ESG factors https://www.polarcapital.co.uk/gb/professional/Our-Funds/Global-Insurance/#/ESG Selected Slides from ESG and Sustainability Insights Presentation October 2023 This presentation This presentation is is for for use use with with non-US non-US pro
Slide 49: ESG Scoring Fund Analysis
ESG Scoring Fund Analysis Proprietary Fund ESG portfolio rating distribution A Rating ESG Rating Distribution1 = Good 20 Key Number of companies 15 AAA – best in class The portfolio overall achieves an A or Good Rating. AAA is defined as best in class. AA – excellent 10 A – good c60% of Fund compani
Slide 50: ESG Proprietary Scoring Over 20+ Factors
ESG Proprietary Scoring Over 20+ Factors ESG analysis drives improved outcomes The Polar Capital Insurance ESG Index Weight Illustration A direction rating of 5 would put the Governance 45% 7.7 Environmental 20% 5.2 company in the bottom half of the Social 20% 7.3 Fund and imply limited ESG Directio
Slide 51: ESG Scoring Case Study – Markel
ESG Scoring Case Study – Markel Progress to date • Markel has a powerful and distinct culture focused on integrity –The Markel Style – but is yet to fully capitalise on this phenomenal asset to harness best-in- class ESG-related outcomes • Markel has begun to make progress on improving diversity whi
Slide 52: UN SDGs Integration
UN SDGs Integration c15-20% Property and Property Catastrophe Fund Environmental SDG Nature Based Solutions Key: SDG 1,2,6,7,8,9, 1,2,4,6,7,8,9, All SDGs Corporate ESG Assessment 10,11,12,13,14,15,17 11,12,13,14,15,17 Seek resources and talent in the assistance and sponsorship of projects to Fund Ma
Slide 53: Global Insurance UN SDG Matrix
Global Insurance UN SDG Matrix Source: Polar Capital, January 2024. All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital. Some information contained herein
Slide 54: UN SDG Alignment – WR Berkley Case Study
UN SDG Alignment – WR Berkley Case Study Product innovation Climate risk and opportunities Berkley Innovation Lab launched in 2020. Climate factors are integrated in underwriting modelling and Michael Nannizzi appointed Head of Fintech in analysis with climate change evaluated at the Enterprise Risk
Slide 55: Biodiversity In Action – Example Project
Biodiversity In Action – Example Project Chubb and The Nature Conservancy’s Miami Mangroves project • Miami ranks as the US metropolitan area with the highest number of homes threatened by storm surge. • Insured value of property on the Florida coast is approximately $2.9trn, according to AIR Worldw
Slide 56: Biodiversity In Action – Example Project
Biodiversity In Action – Example Project Chubb and The Nature Conservancy’s Miami Mangroves project • Wind and swell waves are rapidly reduced as they pass through mangroves, lessening wave damage during storms • Wide areas of mangroves can reduce tsunami heights, helping to reduce loss of life and
Slide 57: Important Information
Important Information Polar Capital, 16 Palace Street, London SW1E 5JD Risks • Capital is at risk and there is no guarantee the Fund will achieve its objective. Investors should make sure their attitude towards risk is aligned with the risk profile of the Fund before investing. • Past performance is
Slide 58: Important Information Cont.
Important Information Cont. Polar Capital, 16 Palace Street, London SW1E 5JD A summary of investor rights associated with investment in the Fund is available online at the above website, or by contacting the above email address. This document is provided and approved by both Polar Capital LLP and Po
Slide 59: Important Information Cont.
Important Information Cont. Polar Capital, 16 Palace Street, London SW1E 5JD Singapore: This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation fo
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