| Mon 6 Feb 2012, 11:02 | | ZSA - Zurich Insurance Company South Africa Limited - Announcement of the |
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ZSA
ZSA
ZSA - Zurich Insurance Company South Africa Limited - Announcement of the
reviewed group results and cash dividend declaration for the year ended
31 December 2011
Zurich Insurance Company South Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1965/006764/06)
Share code: ZSA ISIN: ZAE000094496
("Zurich" or "the Group" or "the Company")
ANNOUNCEMENT OF THE REVIEWED GROUP RESULTS AND CASH DIVIDEND DECLARATION FOR
THE YEAR ENDED 31 DECEMBER 2011
- Transformation programme complete
- Net asset value per share up 7%
- International solvency margin strengthens to 68%
- Full year dividend of 300 cents per share
Condensed consolidated statement of financial performance
for the year ended 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Gross written insurance premium 3,890,028 4,632,362 (16%)
Insurance premium ceded to reinsurers (912,495) (978,900)
Net written insurance premium 2,977,533 3,653,462 (19%)
Net insurance premium earned 3,001,609 3,713,765 (19%)
Reinsurance commission earned 163,249 168,526
Investment income 219,983 240,696
Employee benefits surplus - 105,552
Other income 16,181 5,747
Realised gains on available-for-sale
financial assets 14,210 6,809
Net income 3,415,232 4,241,095 (19%)
Net insurance claims 1,977,622 2,576,852 (23%)
Acquisition costs 623,568 747,659
Impairment of available-for-sale
financial assets 7,395 11,998
Administrative and other operating
expenses 578,608 692,029 (16%)
Investment expenses 6,376 4,939
Expenses 3,193,569 4,033,477 (21%)
Profit from operating activities 221,663 207,618 7%
Finance costs (28,200) (13,511)
Share of profit/(loss) in associates 333 (1,708)
Profit before tax 193,796 192,399 1%
Income tax expense (69,231) (47,982)
Profit for the year 124,565 144,417 (14%)
Earnings per share (cents) 1,022.7 1,185.7
Condensed consolidated statement of other comprehensive income
for the year ended 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Profit for the year 124,565 144,417
Other comprehensive income
Exchange differences on translating
foreign operations 1,855 (5,246)
Realised gains on available-for-sale
financial assets transferred
from/recycled to the statement of
financial performance (14,210) (6,809)
Impairment losses transferred to
statement of financial performance 7,395 11,998
Net unrealised gains on available-for-
sale financial assets 25,724 94,060
Income taxation relating to
components of other comprehensive
income (2,032) (13,913)
Total other comprehensive income for
the year 143,297 224,507 (36%)
Condensed consolidated statement of financial position
as at 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Assets
Land, buildings and equipment 94,131 112,690
Intangible assets 56,424 53,519
Investments in associates 4,902 4,560
Financial assets 2,920,147 3,036,859
Deferred taxation asset - 18,468
Pre-payment of defined contribution
fund 142,300 134,544
Deferred acquisition costs 94,504 102,192
Reinsurance assets 585,910 970,283
Income taxation asset 19,652 26,355
Cash and cash equivalents 981,803 1,072,454
Total assets 4,899,773 5,531,924 (11%)
Equity and liabilities
Total equity 2,014,945 1,883,827
Deferred taxation liability 19,451 -
Employee benefit obligation 64,551 41,494
Financial liabilities held at
amortised cost 183,831 281,597
Insurance liabilities 1,820,397 2,447,738
Deferred reinsurance commission 14,610 17,264
Trade and other payables 767,265 838,848
Provisions 14,723 21,156
Total equity and liabilities 4,899,773 5,531,924 (11%)
Condensed consolidated statement of changes in equity
as at 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Share capital and premium 4,650 4,650
Translation reserve (35,053) (36,908)
Revaluation reserve 310,818 293,941
Statutory contingency reserve 314,095 375,365
Retained income 1,420,435 1,246,779
Balance at end of the period 2,014,945 1,883,827 7%
Condensed consolidated cash flow statement
for the year ended 31 December 2011
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Cash effect from operating activities (13,543) 175,623
- Cash flows from operations (193,551) (125,972)
- Dividend and interest income 206,783 227,185
- Taxation (paid)/refunded (26,775) 74,410
Cash effect from investing activities (64,928) (135,865)
Cash effect from financing activities (12,180) -
Net movement in cash and cash
equivalents (90,651) 39,758 (328%)
Cash and cash equivalents at
beginning of the period 1,072,454 1,032,696
Cash and cash equivalents at end of
the period 981,803 1,072,454 (8%)
Notes
The Annual Financial Statements have been prepared under the supervision of
the Chief Financial Officer (CFO), Pieter Bezuidenhout, Chartered Accountant
(SA), and have been reviewed by PricewaterhouseCoopers Inc. in compliance with
the requirements of the Companies Act of South Africa.
1. Accounting policies and basis of preparation
The financial results have been prepared in accordance with International
Financial Reporting Standards (IFRS), in particular IAS34 - Interim Financial
Reporting. The principal policies used in the presentation of the reviewed
results for the year ended 31 December 2011 are consistent with those applied
in the Annual Financial Statements for the year ended 31 December 2010.
2. Financial highlights
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Profit for the year 124,565 144,417 (14%)
Adjusted for:
Loss on disposal of plant and
equipment 683 2,668
Gains on disposal of available-for-
sale financial assets (14,210) (6,809)
Impairment of available-for-sale
financial assets 7,395 11,998
Tax effect 1,207 (1,100)
Headline earnings 119,640 151,174 (21%)
Headline earnings per share (cents) 982.3 1,241.2
Earnings per share (cents) 1,022.7 1,185.7
Ordinary dividends declared per share
(cents) 200 -
Dividends paid per share (cents) 100 -
Number of shares in issue 12,179,500 12,179,500
Net asset value per share (cents) 16,544 15,467 7%
International solvency margin (%) 67.7 51.6 31%
Combined ratio (%) 97.9 97.5
3. Segmental information
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Gross written insurance premium
Property 1,391,949 1,634,330
Transport 134,608 170,825
Motor 1,733,932 2,152,051
Engineering 355,940 384,088
Guarantee (2,250) 513
Liability 106,411 113,322
Accident & Health 169,438 177,233
Gross written insurance premium 3,890,028 4,632,362 (16%)
Net income
Property 948,487 1,131,118
Transport 122,468 145,796
Motor 1,682,462 2,105,553
Engineering 257,706 335,527
Guarantee (1,467) (28,006)
Liability 73,917 99,456
Accident & Health 81,285 92,846
Other 250,374 358,805
Net income 3,415,232 4,241,095 (19%)
General insurance result
Property (54,868) (64,244)
Transport 54,401 14,722
Motor (7,202) 112,364
Engineering 22,115 61,945
Guarantee 20,695 (67,524)
Liability (3,444) (8,308)
Accident & Health 30,597 45,868
Net underwriting result 62,294 94,823 (34%)
Attributable investment income 80,549 95,418
General insurance result 142,843 190,241 (25%)
4. Supplementary income statement
Year ended Year ended
31 Dec 2011 31 Dec 2010
Rand thousands Reviewed Audited % Change
Gross written insurance premium 3,890,028 4,632,362
Insurance premium ceded to reinsurers (912,495) (978,900)
Net written insurance premium 2,977,533 3,653,462 (19%)
Net insurance premium earned 3,001,609 3,713,765
Net insurance claims (1,977,622) (2,576,852)
Net commission incurred (460,319) (579,134)
Administrative and other operating
expenses (501,374) (462,956)
Net underwriting result 62,294 94,823 (34%)
Attributable investment income 80,549 95,418
General insurance result 142,843 190,241 (25%)
Impairment of available-for-sale
financial assets (7,395) (11,998)
Employee benefits surplus - 105,552
Non-technical expenses (77,234) (223,325)
Other investment income 127,748 130,059
Investment expenses (6,376) (4,939)
Net realised gains on disposal of
investments 14,210 6,809
Profit before tax 193,796 192,399 1%
Income tax expense (69,231) (47,982)
Profit for the year 124,565 144,417 (14%)
Comments
The results for the year have been impacted by a decline in business volumes
of 16% to R3.9 billion (2010: R4.6 billion), offset by improved loss ratios
and operational efficiencies. Ongoing management actions continue to further
improve profitability and growth.
Despite major weather-related losses in the first quarter of the year, the
implementation of a number of claims initiatives has positively influenced the
cost of claims which, at R2 billion, reflect a 23% improvement from R2.6
billion in the prior period.
Expenses have been well controlled and reflect the benefits from the business
transformation programme embarked on in 2010 together with additional
initiatives undertaken in the current year.
The general insurance result is a surplus of R142.8 million (2010: R190.2
million) and the underwriting result, which reflects a surplus of R62.3
million (2010: R94.8 million), is expected to be strengthened through the
delivery of a focused growth strategy flowing through 2012.
Attributable investment income at R80.5 million (2010: R95.4 million) is down
on prior year due to lower premium volumes and a declining interest rate
environment. Despite this, profit before tax at R194 million is up by 1% on
prior year.
Net asset value per share is up 7% from R155 to R165 and this improvement
reflects in the strengthening of the international solvency margin from 51.6%
to 67.7%. In addition, the Company has maintained its AA credit rating.
Having considered the successful completion of the business transformation
programme and the underlying profitability and financial position of the
Company, the Directors have declared a final dividend for the year of 200
cents per share, bringing the full year dividend to 300 cents (2010: Nil).
Changes in Directorate
No changes have been made to the Directorate in 2011.
Audit
The information set out in the announcement has been reviewed by the Company`s
auditors, PricewaterhouseCoopers Inc. and their unqualified review opinion is
available for inspection at the Company`s registered office.
Compliance
The Group complies in all material respects with the King Report Code of
Corporate Practices and Conduct and the Listings Requirements of the JSE
Limited.
Cash Dividend Declaration No. 77
The Directors have declared a final cash dividend for 2011 of 200 cents per
share bringing the total cash dividend for 2011 to 300 cents per share.
The cash dividend is payable in accordance with the following timetable:
Last day to trade in order to participate in the Friday, 24 February 2012
dividend:
Shares commence trading ex the dividend from the Monday, 27 February 2012
commencement of business on:
Record date: Friday, 2 March 2012
Payment date: Monday, 5 March 2012
Shareholders may not dematerialise or materialise their holdings of shares in
the Company between Monday, 27 February 2012 and Friday, 2 March 2012, both
days inclusive.
By order of the Board
Johannesburg
6 February 2012
Board of Directors: JPG de Rauville (Independent Non-Executive Chairman), GRC
Munnoch (Chief Executive Officer), P Bezuidenhout (Chief Financial Officer),
JPM Deiss (Non-Executive), S Mered (Non-Executive), PC Rorich (Non-Executive),
MN Mbekeni (Independent Non-Executive), DD Mokgatle (Independent Non-
Executive), SG Morris (Independent Non-Executive)
Transfer Secretaries: Computershare Investor Services (Pty) Limited, 70
Marshall Street, Johannesburg, 2001
Group Company Secretary and Registered Office: G Kostopoulos, Zurich Insurance
Company South Africa Limited, Registration number 1965/006764/06, 15 Marshall
Street, Ferreirasdorp, Johannesburg, 2001,
PO Box 61489, Marshalltown, 2107)
Sponsor: RAND MERCHANT BANK, (A division of FirstRand Bank Limited),
1 Merchant Place, Cnr Fredman Drive and Rivonia Road, Sandton, 2196
www.zurich.co.za
Date: 06/02/2012 11:02:01 Produced by the JSE SENS Department.
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