Guardrisk profits up 110% to R145m

GUARDRISK, South Africa's leading specialist insurance group, has raised after-tax profits for the year ended March 2003 by 110% from R69 million to R145 million.

This was achieved on gross written premium of R2.1 billion, 16% up on the R1.82 billion registered in the previous financial year. Guardrisk's long-term operation - Guardrisk Life - enjoyed exceptional growth with premium income increasing by 118% from R231 million to R503 million.

"Guardrisk Life's growth is expected to continue as the increasing international trend of moving employee benefit schemes into self insurance vehicles is expected to take hold in South Africa," says MD, Herman Schoeman.

For Guardrisk Insurance, the group's short-term operation, the solvency margin (net written premiums to shareholders equity), a key indicator of the ability to meet future claims, was stable at 44% - on the high side of industry norms and well above Financial Services Board requirements.

During the past year Guardrisk Life increased its capital adequacy requirement (an actuarial calculation of the minimum amount of solvency capital that must be held to allow for volatility in the results of a block of life insurance business) by 66% to 7.0x.

The group's operating margins rose to well in excess of industry norms: shareholders' funds increased by 80% from R514 million to R927 million and assets under administration rose by 28% from R1.97 billion to R2.53 billion.

In this, its 10th anniversary year, Schoeman says that Guardrisk has enjoyed a "healthy combination of organic and new business growth" - at a time when the local insurance industries internationally are experiencing difficulty.

"In the case of organic growth, those cell-owners who bought into the concept of alternative risk transfer structures during soft markets are reaping handsome benefits for the foresight. At the same time, new business has come from cell owners responding to unprecedented rises in pay-away premiums by entering into self insurance structures," says Schoeman.

Guardrisk is a 100% subsidiary of the JSE listed Alexander Forbes Group.

Article posted on 2003/9/17

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