Results for the six months ended 30 June 2009
Message from Chief Executive Officer Nick Beyers
The Board approved our half year results 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
R2,872,055
Profit after tax
R106,429
Net investment income
R161,262
Total assets
R5,413,142
Solvency margin (%)
43.1
Gross premium income grew by 8.1% to R2.9 billion. The commercial portfolio, which represents 69% of total premiums, grew by 10.7% and the personal portfolio by 16.2% following rating adjustments and real growth in the portfolio. Risk Financing contracted following deliberate action by management.
The first half of 2009 saw a continuation of the tough economic conditions that have impacted the industry. Claims at R1.7 billion are up 11% on 2008. While the fires in Gauteng and Cape Town contributed to the cost of claims, the major concern is still the motor book where losses have remained stubbornly high despite continued corrective action being taken.
The underwriting result declined to a deficit of R24.5 million from a surplus of R10.8 million during the same period in 2008 and the general insurance result (inclusive of attributable investment income) declined from R65.6 million to R30.7 million.
Total investment income was most satisfactory in the current market environment and follows further rebalancing of the investment portfolio. Dividend and interest income increased by 77% to R140.6 million and was unaffected by the losses suffered on the bond portfolio last year. The sale of equities realised gains of R23 million.
The Group’s balance sheet and cash flows remain strong. At 43.1%, the solvency ratio remains within the target range as set by the Board. Net asset value decreased by 1.4% to R154.38 per share at the end of the period. In order to conserve capital, the Board has decided not to declare an interim dividend.
The Board recognises the cyclical nature of short-term insurance results and investment markets and cautions that the results for the six months are not necessarily indicative of the outcome for the remainder of the year.
In closing, we would once again like to thank you for your loyalty and continued support.
