Results for the year ended December 31, 2007 Message from Chief Executive Officer Nick Beyers
The Board approved our year-end results on February 22, and the salient figures are given below. Full details, as published in the press, are contained in the attached leaflet.
Rand thousands
Insurance premium revenue
R4,400,960
Net profit attributable to members of the Company
R289,860
Investment income
R225,595
Total assets
R4,752,124
Solvency margin (%)
53.2
We are pleased to announce that profit before tax was maintained at a similar level as was achieved in the previous year. Gross premium income rose by an expected 12.5%. This increase was achieved despite a reduction in the contribution received from our Zimbabwean subsidiary due to currency devaluation. The growth in premium, although slightly lower than in the period to June 2007, is still satisfactory in a challenging market.
In 2007, the Group benefited from a net pension fund surplus of R43 million including related investment income (2006: R97 million, after accounting for a R133 million expense of conversion from a defined benefit to a defined contribution employee pension fund).
The increase in both the number and the quantum of claims continued into the second half of the year. This resulted in an increase in claims of some 15%. The main area of concern remains the motor book. Corrective action continues to be taken on the motor account. The implementation of a revised procurement policy, an actuarial rating structure, disciplined underwriting and the cancellation of poor performing business will be our focus for 2008.
Investment income showed an increase of R42 million which reflected the enhanced interest rates received by the Group on funds deposited at institutions. The through income fair value adjustment continued to show a loss. This was offset by the increase in realised gains on the disposal of equities held as available-for-sale. Investment related income therefore increased over 2006 levels by 16.4%.
The Group’s balance sheet remains strong with an increase in net asset value of 8%. Solvency is satisfactory at 53.2% and, having taken this into consideration, a final dividend of 440 cents per share was declared bringing the total normal dividend for the year to 700 cents per share (2006: 650 cents per share).
I’d like to take this opportunity to thank you, our business partners, for your loyalty and continued support.
