Zurich Insurance Company South Africa’s year end results
Johannesburg, 25 February 2010 – Zurich Insurance Company South Africa Limited today announced the Group’s results for the year ended 31 December 2009.
Overall, the results reflect a continuation of the tough underwriting conditions that have impacted the insurance industry. In addition, the Company incurred a number of significant non-recurring losses unrelated to its normal underwriting activity.
Gross premium income grew by 1.7% to R5.4 billion (2008: R5.3 billion). This follows the cancellation of underperforming blocks of business amounting to R500 million, mainly in the Personal Lines Group Schemes portfolio, which no longer met the Group’s stricter underwriting criteria. Premiums in the Risk Finance division declined sharply for the same reason. These actions are already yielding the desired result in strengthening the underlying profitability of the business.
Claims at R3.7 billion have risen 18.9% (2008: 18.8%) impacted by an increase in the frequency and severity of fire losses in the commercial property account. The largest increase in claims cost however was in the motor account that saw a sharp rise in the frequency of losses arising from motor vehicle accidents.
The underwriting result declined to a deficit of R564 million from a deficit of R38 million in 2008. The combined ratio for the year was 113.2% (2008: 100.9%). The general insurance result, inclusive of attributable investment income, declined from R31.9 million to a deficit of R458 million.
“2009 was a tough and challenging year for the organisation,” commented Guy Munnoch, Chief Executive Officer, Zurich Insurance Company. “We had a number of non-recurring items that significantly impacted our result and we have taken robust action to address these areas. We are confident that our business transformation programme will support the delivery of sustainable, profitable results going forward and we are taking decisive action now to position ourselves to pursue our goal of becoming a leader in our chosen markets,” he said.
Investment income was maintained despite a reduction in interest rates in the current year. The sale of equities realised gains of R108 million (2008: R98 million).
The Group’s balance sheet and cash flows remain sound. At 39.0%, the solvency ratio is broadly within the target range as set by the Board. Net asset value decreased by 10.5% to R136.47 per share at the end of the year.
Issued on behalf of
Zurich Insurance Company South Africa Limited
For further information, contact
Rosemary Renton, Corporate Communications Consultants (Pty) Ltd
Zurich Financial Services Group (Zurich) is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia-Pacific, Latin America and other markets. Founded in 1872, the Group is headquartered in Zurich, Switzerland. It employs approximately 60,000 people serving customers in more than 170 countries.
Zurich in South Africa is a short-term insurance company headquartered in Johannesburg and listed on the Johannesburg Stock Exchange. Founded in 1965, it offers insurance products and services that respond to the needs of individual, commercial and corporate customers. It has a network of sales areas and a series of service outlets across the country, and employs approximately 1,000 people. In addition, it has subsidiaries locally as well as in Botswana and Zimbabwe.
