Johannesburg - The market has taken a bit of a shine to Clientele Life Assurance, one of the smaller long-term assurers listed on the JSE.
The company's shares rose to a record R35 yesterday after Monday's news that annual profit at the life assurer had climbed 36 percent to R84 million on rising policy sales.
Clientele Life, which has the Hollard Group as a major shareholder with 84.4 percent of its stock, has been building up its market share in the under-served but growing lower- to middle-income markets.
The company said 87 percent of new policies written had been issued to black people.
"Clientele Life's proven methods of distributing simple and easy-to-understand products directly to its customers continues to deliver consistent strong growth in life operations," the company said in a statement.
There had been "compound growth in excess of 50 percent a year since becoming listed on the JSE eight years ago".
Clientele Life has moved from being heavily dependent on telesales to the use of brokers, or what the company calls independent field advisers, with broker-originated sales now making up 60 percent of total sales.
It said policyholders' net benefits, which included claims paid and encashment benefits, had increased by 72 percent in the year to June, while the "much-improved investment performance" on the JSE had contributed to the 197 percent increase in policyholder new investment returns.
Net recurring premium income for the year came in 20 percent higher at R352.5 million, while profit from the life operations increased by 46 percent to R119.6 million.
Profit before taxation rose by 47 percent to R130 million and headline earnings a share climbed 35 percent to R2.58.
An ordinary dividend of R2.50 a share was declared.
Steve Meintjes of Imara SP Reid said in a note to investors yesterday that while Clientele Life still faced the challenges of a lack of liquidity and black economic empowerment, the company was operating in a space where there was a great demand for appropriate life insurance and savings products.
Niche life insurance businesses focused on the entry-level market have become hot property of late.
Last week Sanlam, one of the country's biggest life assurers, acquired 100 percent of African Life Assurance and snapped up majority control of Channel Life.
Shares in Clientele Life closed 0.86 percent firmer at R35 on the JSE last night, while the life assurance sector gave up 0.6 percent on the day.