The softening insurance cycle and a return to more normal claims patterns placed pressure on
underwriting performance during the period. The Group generated an annualised weighted average
return on shareholders’ funds of 17.8% compared to 21.7% in 2005.

Headline earnings, which excludes realised investment surpluses, of R72.1 million for the six months
were 28.6% lower compared to the same period in 2005. Earnings per share of R130.6 million for the six months were 7.1% lower compared to the same period in 2005, mainly as a result of the higher realised gains and investment income compared to last year.

The net underwriting result for the period was R57.3 million (2005: R92.3 million).

The Company experienced an increase in claims as a result of fire incidents and adverse weather
conditions including hailstorms in KwaZulu-Natal and heavy rains in Gauteng.

The motor account was negatively impacted by an increase in the incidence of accidents and vehicle
hijackings. While the Company has noted some increase in the cost of repairs for imported vehicles,
overall it has largely been able to contain motor repair costs. Pricing appropriately for this risk will
continue to be a focus. Corrective action will be taken to address profitability in all affected classes
of business.

An 11.2% increase in premium revenue during the first six months of the year compared to 10% in
2005, reflected satisfactory growth in highly competitive market conditions.

Investment income for the period improved by 10.2% as a result of increased interest and dividend
income.

The solvency margin increased by 6% to 54.0% (2005: 48.3%) and remains above the stated policy of maintaining solvency within the 40% to 50% range.

Given the strong solvency position, the Directors have declared an interim dividend of 220 cents per
share (2005: 200 cents per share).

While the Directors are confident regarding the Group’s prospects for the remainder of the year
it should be noted that underwriting as well as investment performance fluctuates and, therefore,
results for the first six months are not necessarily indicative of the year-end result.