Bryanston, 10 February 2005

Reporting on its year-end results today, short-term insurer SA Eagle posted its best result in recent years. The company announced an underwriting profit of R235.8 million (2003: R127.7 million). Growth in gross written premiums was marginally up at R3 191 million reflecting the competitive market conditions experienced by the industry.

Headline earnings increased by 45.1% to 2 140.8 cents per share.

Commenting on the exceptional underwriting result Managing Director, Nick Beyers attributed the positive performance to a consistent focus on underwriting discipline, appropriate pricing and rigorous risk assessment. Improved claims management and the fact that benign weather conditions resulted in fewer natural catastrophes also contributed to the strong result.

While all underwriting accounts performed well during the year, the motor account in particular produced a very satisfactory turnaround. Beyers points out that reduced inflationary pressure coupled with the strengthening rand benefited claims settlement, especially in respect of motor repairs and the cost of replacing imported spares.

Investment income increased to R169.0 million (2003: R152.8 million). This increase reflects the growth in cash flows resulting from the improved underwriting and operating performance. The equity disposal programme continued, resulting in a surplus on these disposals of R70.1 million (2003: R49.9 million).

The company’s solvency margin has improved significantly to 57.9% (2003: 47.1%). “The strong underwriting result has been the main contributor in this regard,” said Beyers.

Taking these factors into account, the Directors have declared a special dividend of 2 300 cents per share which is payable on 14 March 2005. A final dividend of 470 cents per share in line with our normal dividend payment pattern will be paid on 18 April 2005, making the total dividend for the year 650 cents per share (2003: 450 cents per share).

Beyers says: “Given that the underwriting cycle is expected to flatten in the medium term and that there has been limited growth in the market for a while now, there will be significant challenges ahead. The main challenge will be to maintain profitability while continuing to grow. Sustaining our underwriting performance and delivering consistent operating results will be our primary focus going forward, but recent global events remind us not to expect this favourable experience to continue indefinitely.”

SA Eagle’s major shareholder, Zurich Financial Services, is an insurance-based financial services provider with a global network that focuses its activities on its key markets in North America and Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. Zurich has offices in more than 50 countries and employs about 62 000 people

For more information contact:
Nick Beyers – Managing Director, SA Eagle
Tel: Office (011) 540 4000

Jim Carter – Deputy Managing Director, SA Eagle
Tel: Office (011) 540 4000

Gaynor Holshausen – Communications Manager
Tel: Office (011) 370 9111

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