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Insurance |
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Insurance | Regent is a leading insurer of motor-related value-added insurance products through dealer and vehicle-finance
channels. This includes Imperial dealerships as well as a significant contribution from independent
dealers. Its products include extended warranties, credit insurance and paint protection.
Regent is also a leading insurer of commercial vehicles, including goods in transit cover, as well as comprehensive passenger car cover sourced though dealerships, OEM partnerships and direct call centres. Regent’s life business specialises in products for individuals and groups in the emerging market. This includes credit life, funeral cover, underwritten risk cover and savings products, sold primarily through brokers but also increasingly through affinity schemes. Regent has leading positions in the Botswana and Lesotho markets, with both short-term and life licences in each jurisdiction. |
R million |
2013 | 2012 | Change % |
H2 2013 |
H2 2012 |
Change % on H2 2013 |
H1 2013 |
Change % on H1 2013 |
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Revenue | 3 287 | 3 112 | 5,6 | 1 628 | 1 631 | (0,2) | 1 659 | (1,9) | |||||||||||
Operating profit | 510 | 419 | 21,7 | 240 | 206 | 16,5 | 270 | (11,1) | |||||||||||
Adjusted investment income | 251 | 175 | 43,4 | 100 | 95 | 5,3 | 151 | (33,8) | |||||||||||
Adjusted underwriting results | 259 | 244 | 6,1 | 140 | 111 | 26,1 | 119 | 17,6 | |||||||||||
Operating margin (%) | 15,5 | 13,5 | 14,7 | 12,6 | 16,3 | ||||||||||||||
Underwriting margin (%) | 7,9 | 7,8 | 8,6 | 6,8 | 7,2 |
Note: Adjusted underwriting in the above table reflects a reallocation of policyholder investment returns from investment income to the underwriting result.
The insurance underwriting performance was much improved in the second half and despite a deteriorating claims experience in the short-term motor class, it was up 6% on the prior year and generated an adjusted underwriting margin of 7,9% for the year. As part of its strategy to focus on its core markets and distribution channels, Regent exited certain non-performing classes of business which were not generating adequate returns for some time. These made up less than 10% of its revenue but had a significant negative impact on underwriting performance. Regent’s other significant product lines in the short-term insurance business delivered excellent results and showed healthy growth from the prior year.
Regent Life performed well, with gross written premiums up 15% for the year, although it was negatively impacted by economic assumption changes, which impacted the underwriting result negatively in the second half.
Investment returns were higher than the prior year as a result of a larger exposure to equity markets, which performed favourably when compared to the prior year. The second half was however more challenging as equity markets were more volatile.
Botswana and Lesotho continue to grow and the exposure to other African countries is becoming a more meaningful contributor to the division.
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