Sechaba ka’Nkosi
JSE-LISTED short-term insurer Indequity Group has reported a 50 percent increase in basic earnings per share for the six months to March.
The company’s chief executive, Lourens Janse van Rensburg, said yesterday that the company’s basic earnings per share increased from 19.11c to 28.65c in the interim unaudited financial statements.
Van Rensburg said while the company had expected positive prospects in the second half of the year, there was general uncertainty in the insurance business.
The company, which was previously known as Indequity Asset Management Unit Trusts & Segregated Share Portfolio Management, said it had brought down its net claims ratio to 45 percent from 50 percent in the comparative previous period.
“The decreased net claims ratio is largely due to the fact that there were no major catastrophic events during the last summer, (we) continued focus to effectively manage costs,” Van Rensburg said.
“In order to trade profitably in the short-term insurance market one needs to strike a sensible balance between premium collections on the one hand and claims on the other,” Van Rensburg added.
He also attributed the underwriting success of the company to its stringent underwriting practices and effective control over claims expenses.
The company said its administration expenses as a percentage of net insurance premium earned decreased from 30 percent to 29 percent for the period, in line with its expectations following the implementation of the efficiency improvements that had been implemented in the business. He said the company was pleased with the 42 percent annualised pretax return it had generated on its capital.
“Indequity’s main objective has always been to create shareholder wealth through the generation of superior returns on capital compared to its peers,” he said.
The company said it had not declared interim dividends to ordinary shareholders in accordance with its operations current cash requirements. Shares on the JSE were untraded yesterday after previously closing at R7.19.
