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| Africa Risk &
Insurance Services |
| Overview |
The Africa Risk & Insurance
Services business delivered a satisfactory result
in a tough market, showing growth in revenue over
the year. Most divisions achieved revenue and
profit growth. The only exceptions were Reinsurance
Solutions and Personal Services, which was impacted
by reduced profits from Personal Lines insurance
in line with the market.
The business continues to attract a high calibre
of staff and is well placed to continue gaining
market share in all areas of the business. Development
of our people remains a top priority for the business.
Over the year, we made a number of structural
changes in order to optimise the business, including
the buy-out of various minority shareholdings
in subsidiary companies. |
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Income from operations |
Trading results |
March
2006
Rm |
% |
March
2005
Rm |
March
2006
Rm |
% |
March
2005
Rm |
|
875 |
+4 |
842 |
187 |
(3) |
193 |
|
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| Divisional review |
| Risk Services |
The Risk Services division
remains the leading provider of insurance broking
and risk advisory services to small, medium and
large commercial, corporate and parastatal clients.
The experience gained by this division over the
past 70 years has enabled us to focus our resources
on identifying and servicing client needs by delivering
well-informed and innovative solutions. We provide
a holistic risk management solution starting with
risk identification and mitigation strategies,
the analysis of available cover options and the
placement of risks in the various insurance markets.
The division experienced challenging trading conditions
as a result of a competitive environment, soft
insurance markets and lower year-on- year interest
rates. Despite this, R25 million of new business
was booked, during the year largely in the construction,
municipal and manufacturing sectors.
Through acquisition activity, the division bolstered
its capacity in the Aviation and Public Sector
markets and is now the leading provider in both
these sectors. |
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| Personal Services |
With a clear understanding
that each client has individual insurance requirements,
Personal Services has developed a comprehensive
range of products to meet these needs, offering
wide levels of insurance cover at competitive
premiums. The division constantly focuses on providing
exceptional client service and quick settlement
of claims.
The division reported lower profits in line with
the Personal Lines insurance market in South Africa.
During the latter half of the year, we invested
in an enlarged sales force and the division is
well positioned for the future. |
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| Cre8 |
| Cre8 was set up approximately
four years ago to drive the research and development
of new, innovative products. It is managed separately
from the broking and advisory business. Cre8 had
an exceptional year, growing revenue and profits.
Cre8 enjoys the support of a wide base of independent
insurance brokers throughout the country and we
expect further growth into the future. |
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| Reinsurance Solutions |
| The Reinsurance Solutions division
manages reinsurance broking interests in South
Africa, Namibia and Mauritius. It produced a disappointing,
albeit small, loss for the year under review.
With the recruitment of additional management
to boost the team, the division aims to achieve
a turnaround in the new financial year. |
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| Guardrisk |
Established as the world’s
first cell captive insurance company in 1993,
and in 2005 having been placed No. 1 in the world
by Business Insurance, this company operates in
the short-term insurance market under Guardrisk
Insurance and within the life assurance environment
under Guardrisk Life.
The division again achieved excellent results
from strong organic growth within a well-managed
operational and compliance environment. Following
the acquisition of Euroguard, an offshore-based
cell captive business, it is expected that this
will be a platform for further growth in the future.
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| Compensation Technologies |
Compensation Technologies recovers
claims from the Road Accident and Workmens Compensation
funds on behalf of medical service providers who
provide treatment to victims of motor vehicle
accidents and workplace accidents. In September
2005, Alexander Forbes bought out the minority
shareholders in this company, which is now a wholly-owned
subsidiary.
The business experienced strong growth in revenue
and profits on the back of various successful
contracts and is expected to continue to grow
into the future. |
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| AfriNet |
With Risk Services offices
in ten African countries outside South Africa,
this network produced solid results for the year.
The division benefited from currency effects in
the early part of the year and strong trading
performances were achieved in Tanzania, Kenya
and Namibia.
AfriNet offers South African clients access to
the widest network of offices and personnel in
Southern, Central and East Africa and the ability
to access a single risk management strategy across
the continent. |
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