Veld fires cost Mutual & Federal R23 million

Mutual & Federal gross premium income increased by 2% to R4.7 billion (2007: R4.6 billion). Gross premiums in the commercial portfolio grew in line with inflation; however the personal portfolio contracted following deliberate action by management to cancel a number of underperforming blocks of business. Risk Finance premiums also declined following lower levels of reinsurance received from insurers in the retail sector.

Claims at R2.83 billion are up 6% on 2007 (R2.66bn) fuelled by a significant increase in the number of commercial and industrial fire claims and ongoing difficulties with the motor section of the group schemes portfolio. As a consequence the underwriting result declined to a deficit of R23 million compared to a surplus of R98 million during the same period in 2007. It should be noted that the 2007 period was favourably impacted by a R48 million reduction in technical reserves.

Commenting on the results, Managing Director Keith Kennedy said: “The first-half of 2008 has been difficult due to a turn in the cycle and an unusually large number of fires best buy credit card online payment. The board recognises the cyclical nature of short-term insurance results and is satisfied that the appropriate corrective measures are being taken to improve underwriting results”.