Guardrisk turns in solid performance - 23 July 2004
Guardrisk, South Africa's leading specialist insurance group, today announced that gross premium written for the year ended 31 March 2004 remained stable at R2.1bn. The short-term operation, Guardrisk Insurance, saw gross premium written (after refunds) increase by 23% to R1.73bn. The life company again showed a strong performance and healthy growth potential in its newly established market in which a handful of operators are already conducting business.

The group's total assets rose by 21% to R3.1bn and total shareholders' funds and policyholders' interests increased by 17% to R524 million.

Guardrisk Insurance?s solvency margin (net written premiums to shareholders equity), a key indicator of the ability to meet future claims, remains stable at 43% - well above industry norms and the Financial Services Board's (FSB) requirements.

"Although it appears as if profits have decreased from the previous year, this clearly indicates that the cell captive structure is working for clients," says Herman Schoeman, MD of Guardrisk. "In other words, reserves are being used to pay claims and, as their cells mature, clients reap the benefit of being able to take on risk for reduced premiums."

During the past year Guardrisk (with the approval of the FSB) amended its shareholders' agreements to ensure full compliance with the proposed new international accounting standards. This had very little impact on the balance sheets of the two insurers and their boards have confirmed that clients still participate in top quality structures in a secure, ring-fenced environment.

"The proposed new international accounting standards will forever change the way local and international insurance markets disclose financial information," says Schoeman, welcoming the fact that the introduction of these accounting standards will, for the first time, provide South Africa with an international accounting standard to account for insurance contracts.

The Guardrisk operations remain the only rated specialist insurers in South Africa: Guardrisk Insurance has had its "AA" domestic claims paying ability rating reaffirmed every year since 1998, while Guardrisk Life was awarded an "A+" financing strength rating in 2003. Both ratings are from Global Credit Rating Co.

Guardrisk expanded its business model into Namibia and Zimbabwe during the past year and the concept has been well received by large corporates, parastatals and intermediaries in these countries.

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