Although the industry continues to operate in a competitive market, Zurich showed strong premium growth with premium revenue rising by 21.7% compared to the same period last year.
The first six months were characterised by a higher incidence of claims and increased claims costs on the property and motor accounts. Also, two severe, unseasonal floods in KwaZulu Natal in March and June negatively affected the underwriting result.
In spite of corrective action taken on the motor account, which included premium increases of more than 20%, the result continued to be impacted negatively due to an increase in the incidence of accidents and crime related losses. Motor repair costs, including the cost of repairing imported vehicles, continued to escalate well above inflation. The Group will, however, continue to take the necessary steps to limit the effect on the underwriting result.
Gains on the disposal of available-for-sale investments were higher than the previous period as the Group continued to rebalance its equity portfolio in line with its investment strategy.
Headline earnings were 28.5% lower compared to the same period last year. This was mainly as a result of the reduced underwriting result, as well as the unrealised losses on the Group’s bond portfolio.
The balance sheet remained strong with cash resources of approximately R2 billion (R1.5 billion: 2007) representing a R400 million improvement since December 2007.
Solvency was satisfactory at 49.1% which was within the Group’s target solvency range of 40% to 50%.
Given the satisfactory solvency position, the Directors have declared an interim cash dividend of 260 cents per share
(260 cents per share: 2007).
The first six months were characterised by challenges, which are expected to persist for the balance of the year.
Messrs Burton and Zungu resigned as Executive Directors during the period. The Board thanks these outgoing Directors for their positive contribution over the years.
The Group complied in all material respects with the JSE Listings Requirements and the King Report Code of Corporate Practices
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