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Friday, April 1, 2005
Huge increase

For its year ended 31st December 2004 Mutual & Federal reports an increase of 13% in gross premium income to R7,4 billion. The company enjoyed a huge increase in underwriting profit from R392 million in 2003 to R663 million.

MD Bruce Campbell said this represented an underwriting ratio of 9,8% to net earned premiums. This ratio was 6,9% in 2003. Accordingly, the General Insurance Result for the year had increased by 44% from R602 million in 2003 to R864 million last year.
“Trading conditions for the period were characterised by a decline in the incidence of claims despite an increase in weather-related losses. Increases in average costs per claim remained low due to management control and a reduction in the price of imported goods following an improvement in the value of the Rand,” he explained.
Most insurance portfolios had returned satisfactory results but Campbell foresaw a need for continued prudent risk selection in respect of large fire and engineering risks as insurance rates appeared to have softened prematurely. The motor results continued to be negatively impacted by increasing repair costs and Mr Campbell reiterated his concern at the ongoing poor driving standards, deteriorating road maintenance and a high level of motor accidents.
In referring to the strong capital position, Mr Campbell commented that the company had paid a special dividend of 350 cents per share on 6th September and this had returned approximately R850 million to shareholders. The final dividend has been increased from 48 cents to 80 cents per share, making the dividend for the year 105 cents per share, an increase of 44%.

Copyright © Insurance Times and Investments® Vol:18.2 1st April, 2005
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