| Comments |
| The underwriting result reflects a surplus of R10.8 million compared to a deficit of R24.5 million in the comparative period last year and the general insurance result (which includes attributable investment income) improved from R30.7 million to R54.7 million.
Gross premium income declined by 16% from R2.9 billion to R2.4 billion. This is in line with the Company’s stated strategy to focus on profitability and combined ratio improvement. Claims at R1.3 billion are down 22% on 2009 (R1.7 billion) and the initiatives currently underway to reshape the claims and underwriting environment are contributing to the positive underwriting result. Investment income attributable to insurance operations declined by 21% and was mainly impacted by changes in interest rates. Non-technical expenses increased sharply to R168 million (2009: R5.8 million) but include a provision of R127 million, in terms of IFRS, for the full cost of the business transformation programme that was embarked on in February 2010. This programme, which will create a strong platform for future profitable growth, is already having a positive impact on underwriting results. In addition, non-technical expenses include a management fee of R32.7 million which came into effect in January 2010 and is payable to the majority shareholder. Other investment income was influenced by market movements and declined by 29% to R60.6 million. The Group’s cash flows remain sound and the balance sheet reflects cash and cash equivalents of R1.4 billion. At 41.3%, the solvency ratio remains within the target range as set by the Board. Net asset value decreased by 13% to R134.02 per share at the end of the period. Having regard to the decrease in earnings per share, the Directors have decided not to declare an interim dividend. Changes in directorate Ivan Perez resigned as Acting Group Company Secretary on 31 May 2010 and George Kostopoulos was appointed as Group Company Secretary on 17 June 2010. Audit Compliance By order of the Board 2 September 2010 Board of directors Transfer secretaries Group Company Secretary and registered Office Sponsor |