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New Africa Capital Financial Services Group - Group Results For The 6 Months
Ended 30 June 2002
Group Results For The 6 Months Ended 30 June 2002
PROGRESS MADE SINCE SECOND HALF OF 2001
Headline earnings per share up 63%
Individual life recurring premium new business up 25%
Significant improvement in individual life new business profit margins
Cost savings on track
Metropolitan Health Group profitable once again (when compared to the six
months ended 31.12.2001)
DIRECTORS` STATEMENT
The directors take pleasure in presenting the unaudited interim results of
the New Africa Capital Financial Services Group for the six months ended 30
June 2002.
These results comply in all material respects with the requirements of AC127
of the South African Statements of Generally Accepted Accounting Practice as
well as with the South African Companies Act of 1973; the Long-term Insurance
Act of 1998; guidelines issued by the Actuarial Society of South Africa; and
the disclosure requirements of the JSE Securities Exchange South Africa.
Presentation of financial statements
The consolidated financial statements are prepared on the fair value and
going concern bases. The principal accounting policies are consistent with
those applied at 31 December 2001, with the exception of new accounting
policies adopted in order to comply with new Statements of Generally Accepted
Accounting Practice.
New Statements of Generally Accepted Accounting Practice
In terms of the requirements of AC135 (investment property), owner-occupied
property is depreciated. Properties occupied more than 30% by the group and
held for use in the supply of services, for administrative purposes or for
capital appreciation for the benefit of policyholders, are classified as
owner-occupied. Owner-occupied properties held on behalf of policyholders are
not depreciated as they are not held for consumption but as part of the
portfolio of investment assets. Owner-occupied properties held on behalf of
shareholders are depreciated over 50 years on the straight-line basis. These
properties are carried at fair value and a non-distributable reserve is
created with the revaluation surplus arising therefrom, as required by AC
123.
REVIEW OF OPERATIONS AND PROSPECTS
The past six months have been very challenging for the group. South Africa
has not escaped the worldwide turbulence and decline in investment markets.
The group`s embedded value nevertheless remained intact. Market conditions
reinforced the need for smoothed bonus products. The negative perceptions
surrounding medium sized financial services companies did, however, make it
more difficult to attract large single premium business.
The group is nevertheless extremely pleased that its net funds received from
clients remained positive and that all key indicators moved in the right
direction over the past six months. There has been growth in individual
recurring premium income. The cost savings committed to at the beginning of
the year are on track, and management is satisfied that the cost reductions
are of a permanent nature. Overall persistency has improved. Clear signs of
recovery in group headline earnings when compared to the last six months of
2001 are encouraging, as is the value of individual life new business, which
is positive in comparison with 2001. Management, however, acknowledges that a
lot more work is required in these areas, and this is ongoing. Finally,
during the period under review the group has refocused and refined both its
capital management and operational strategy.
The board is therefore optimistic that the initiatives implemented during the
second half of the previous year and the first half of the current year,
which have already contributed to an improved operating position, will result
in further operational improvements in the latter half of the current year.
The results for the six months were adversely affected by certain amounts
that relate to the previous year, as detailed in the note to the statement of
actuarial values of assets and liabilities.
Share buy-back
During the period under review Metropolitan Life Limited, a wholly owned
subsidiary of New Africa Capital Limited, acquired 13 million (2001: 28
million) New Africa Capital shares. The transactions were in accordance with
the company`s constitution and complied in all respects with the South
African Companies Act and the requirements of the JSE Securities Exchange
South Africa. The total of R344 million that was paid to acquire 41 million
treasury shares has been deducted from shareholders` equity. The total
shareholding, through policyholders` and shareholders` funds, currently held
by subsidiary companies is 10%, which is the limit set in terms of the
general authority renewed by shareholders on 28 May 2002.
In addition, New Africa Capital acquired 20 million shares for a total of
R149 million, of which 19 million were cancelled on 30 June 2002 and the
remaining 1 million on 30 August 2002. The total amount that was paid to
acquire these shares has been deducted from shareholders` equity. The group
set an initial target of R500 million for the share buy-back, and this target
was reached during the period.
CORPORATE GOVERNANCE
The board has satisfied itself that locally recognised principles of
corporate governance were applied throughout the group for the period under
review. Additional governance recommendations, as set out in the second King
report, are currently being addressed and implemented.
Directorate changes and directors` shareholding
Mr P C Lamprecht was appointed to the board on 26 March 2002; no further
changes have been made to the directorate since 31 December 2001.
In June 2002, 620 000 unlisted shares were allocated to executive directors
at an issue price of R6.53 per share as part of the annual share purchase
scheme allocation to staff, but were only accepted after the period-end in
July 2002. Mr M L Smith, a non-executive director, sold listed shares as
disclosed on SENS on 20 May 2002. No other shareholding changes occurred
between 1 January 2002 and the approval of the interim results.
CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
At 30 June the group had capital commitments of R15 million in respect of
furniture and computer equipment to be financed from internal sources.
In terms of the staff share scheme trusts, New Africa Capital Limited has
guaranteed any shortfall due to Metropolitan Life Limited, the funder of the
trusts, at the termination thereof. At 30 June 2002 the exposure in terms of
this guarantee amounted to R82 million (40 million shares; loans of R332
million). This amount was determined by using the actual loan value and the
ruling market price of the underlying shares at 30 June 2002.
The group is aware of a potential claim arising against Metropolitan Health
(Proprietary) Limited to be instituted by the liquidator of Publiserve
Medical Scheme up to a maximum of R10 million. The directors believe that no
material liability will arise for shareholders.
POST BALANCE SHEET EVENTS
Share allocation
Shares totalling 14 million were issued to the staff share scheme trusts in
June 2002 at an issue price of R6.53 per share but were only accepted after
the period-end in July 2002. The loans to the trusts increased by R93
million.
Share Transactions Totally Electronic (STRATE)
Many New Africa Capital (NAC) shareholders have not yet dematerialised their
shares by converting their existing share certificates into the electronic
format required by STRATE, the JSE`s new trading system. All such
shareholders are encouraged to surrender their paper certificates to a
Central Securities Depository Participant - either a bank or a broker - as
soon as possible, but by 29 September 2002 at the latest, on which date the
insurance cover provided by what is known as the Dispossessed Members` Fund
expires. This fund was established specifically to cover losses or claims
arising from any tainted and therefore invalid certificates that may exist in
the marketplace. Shareholders who fail to meet the dematerialisation deadline
will therefore be placing themselves at risk.
DIVIDEND DECLARATION
The directors have declared a dividend of 17.50 cents per share as detailed
in a separate announcement.
Signed on behalf of the board
Gloria Tomatoe Serobe
Group chairman
Peter Doyle
Group chief executive
Cape Town
17 September 2002
Registration number:
2000/031756/06
Registered office:
7 Parc du Cap, Mispel Road, Bellville 7535
JSE code:
NAC ISIN NO. ZAE000033361
INTERIM DIVIDEND DECLARATION
The dividend policy approved by the directors, and consistent with prior
years, is to provide shareholders with stable dividend growth that reflects
expected growth in underlying earnings in the medium term. It is also the
policy that at the half-year stage the company declares, as the interim
dividend, an amount equal to half of the prior year`s normal dividend.
This interim dividend policy was implemented when the group did not carry out
an actuarial valuation at the half-year stage. Now that this valuation is
part of the interim process, the board has decided to re-consider the interim
dividend policy with effect from 2003.
An interim dividend of 17.50 cents per share has been declared on 17
September 2002. This dividend is payable to holders of ordinary shares
recorded in the register of the company at the close of business on Friday,
11 October 2002 and will be paid on Monday, 14 October 2002. The last day to
trade "cum" dividend will be Friday, 4 October 2002. The shares will commence
trading "ex" dividend from the commencement of business on Monday, 7 October
2002. Share certificates may not be dematerialised or rematerialised between
Monday, 7 October and Friday, 11 October 2002, both days inclusive.
Where applicable, dividends in respect of certificated shareholders will be
transferred electronically to shareholders` bank accounts on payment date.
In the absence of specific mandates, dividend cheques will be posted to
shareholders.
A special dividend of sixteen million rand was declared to participants in
the share purchase scheme while participants in the share incentive scheme
receive the same dividend as ordinary shareholders.
The directors are unanimously of the opinion that, for the 12 months after
the date of the declaration:
the company will be able to pay its debts as they become due in the ordinary
course of business;
the consolidated assets of the company, fairly valued in accordance with
Generally Accepted Accounting Practice, will after the dividend payment, not
be less than the consolidated liabilities of the company.
Signed on behalf of the board
Gloria Tomatoe Serobe
Group chairman
Peter Doyle
Group chief executive
Cape Town
17 September 2002
Registration number:
2000/031756/06
Registered office:
7 Parc du Cap, Mispel Road, Bellville 7535
Transfer secretaries:
Computershare, Edura 41 Fox Street, Johannesburg 2000
P O Box 61051 Marshalltown 2107
JSE code: NAC - NSX CODE: NWC
ISIN NO: ZAE000033361
NEW AFRICA CAPITAL GROUP RESULTS
CONSOLIDATED INCOME 6 mths to 6 mths to 12 mths to
STATEMENT 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Income from insurance
business (120) 247 589
Revenue 2 481 4 957 10 343
Premium income (note 1) 2 894 3 601 7 009
Recurring premiums 1 987 1 910 4 087
Single premiums 907 1 691 2 922
Investment return (413) 1 356 3 334
Investment income 969 1 000 2 317
Realised and unrealised (1 382) 356 1 017
changes in market value
of investments
Outgo 3 208 3 084 5 850
Policyholders` benefits 2 490 2 447 4 493
paid (note 2)
Sales and distribution 310 265 575
costs
Administration expenses 331 311 665
Policyholders` tax paid 77 61 117
Revenue less outgo (727) 1 873 4 493
Transfer to long-term 607 (1 626) (3 904)
insurance fund
Income from administration 43 46 34
business (note 3)
Income from holding company (42) - 11
Income before goodwill and (119) 293 634
tax
Goodwill amortised (25) (20) (42)
Income before tax (144) 273 592
Shareholders` tax paid (29) (26) (198)
Income after tax (173) 247 394
Outside shareholders` (1) (6) (9)
share of profit
Earnings (174) 241 385
Capital appreciation on 383 (172)
excess
Deferred tax - CGT (59) 124
Goodwill amortised 25 20 42
Headline earnings (note 4) 175 261 379
NEW AFRICA CAPITAL GROUP RESULTS
CONSOLIDATED INCOME 6 mths to 6 mths to 12 mths to
STATEMENT 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Headline earnings per share 25.66 36.78 52.49
(cents)
Earnings per share (cents) (25.51) 34.02 53.32
Weighted average number of 682 726 722
shares in issue (million)
Dividend per ordinary listed
shares (cents)
Interim 17.50 15.50 15.50
Final 19.50
Total 35.00
CONSOLIDATED BALANCE SHEET 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
ASSETS
Non-current assets
Investment assets 30 709 29 403 31 801
Equipment 139 134 147
Intangibles 84 49 71
Goodwill 410 396 375
Deferred tax 4 4 7
Current assets 1 393 1 487 1 425
Total assets (note 6) 32 739 31 473 33 826
EQUITY AND LIABILITIES
Capital and reserves (note 7) 4 482 2 693 5 101
Outside shareholders` interest 30 68 83
Non-current liabilities 26 567 27 484 27 172
Long-term insurance fund 26 485 27 389 27 048
Deferred tax 82 95 124
Current liabilities 1 660 1 228 1 470
Total equity and liabilities 32 739 31 473 33 826
NEW AFRICA CAPITAL GROUP RESULTS
CONSOLIDATED STATEMENT OF CHANGES IN 6 mths to 6 mths to 12 mths to
EQUITY 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Shareholders` equity at beginning of 5 101 2 335 2 335
period
Changes in share capital (245) 117 1 709
Shares issued in terms of scheme 1 839
arrangement
Issue of share capital to staff - 7 -
schemes
Share premium on new issue 14 110 128
Share issue costs written off (24)
Treasury shares acquired (110) (234)
Shares acquired and cancelled (149)
Changes in distributable reserve (456) 241 1 036
Dividend in specie (1 839)
Transfer (to)/from long-term (37) 2 619
insurance fund
Transfer to foreign currency (21)
translation reserve
Transfer to non-distributable (85)
reserve
Transfer from outside shareholders 1
Earnings (174) 241 385
Dividend (161) (108)
Changes in foreign currency (3) - 21
translation reserve
Transfer from distributable 21
reserve
Currency translation difference 4
Transfer to long-term insurance (7)
fund
Change in non-distributable reserve 85 -
Transfer from distributable 85
reserve
Shareholders` equity at end of 4 482 2 693 5 101
period
NEW AFRICA CAPITAL GROUP RESULTS
CONSOLIDATED CASH FLOW 6 mths to 6 mths to 12 mths to
STATEMENT 30.06.200 30.06.200 31.12.2001
2 1 Rm
Rm Rm
Net cash inflow from 837 1 221 3 352
operating activities
Net cash outflow from (729) (1 465) (2 588)
investing activities
Net cash (out)/inflow (245) 117 (130)
from financing activities
Net cash flow (137) (127) 634
Cash resources and funds 3 125 2 491 2 491
on deposit at beginning
of period
Cash resources and funds 2 988 2 364 3 125
on deposit at end of
period
STATEMENT OF ACTUARIAL 30.06.200 30.06.200 31.12.2001
VALUES OF ASSETS AND 2 1 Rm
LIABILITIES Rm Rm
Total assets per balance 32 739 31 473 33 826
sheet
Current liabilities and (1 742) (1 323) (1 594)
deferred tax per balance
sheet
Outside shareholders` (30) (68) (83)
interest per balance
sheet
Actuarial liabilities (25 718) (23 938) (26 200)
under unmatured policies
Excess of assets over 5 249 6 144 5 949
liabilities (note 7)
Change in excess of (700) 227 32
assets over liabilities
Increase in share capital (14) (116) (128)
Share buy-back and share 259 258
issue costs
Opening basis change 90 24 43
Dividend declared 161 - 108
Total surplus arising (204) 135 313
during period
FSV profit (note 4) 159 267
Operating profit 76 180
Investment income on 83 87
group excess
Basis change at end (2) (21)
Capital (361) (111)
(depreciation)/appreciat
ion on group excess
Effect of change in 2 21
basis
Commercial Union Life 28 (20)
(90:10)
Capital depreciation on 111
group excess
Earnings (174) 247 385
NEW AFRICA CAPITAL GROUP RESULTS
STATEMENT OF ACTUARIAL 30.06.2002 30.06.2001 31.12.2001
VALUES OF ASSETS AND Rm Rm Rm
LIABILITIES
Capital adequacy 1 672 1 613 1 397
requirement
Capital adequacy multiple 3.1 3.8 4.3
(times)
Bonus stabilisation (625) 85
reserve
Bonus stabilisation (437) 178
reserve excluding
Commercial Union Life
Second-tier margins 1 182 1 231
The current capital depreciation on the group excess includes R43 million
relating to the 2001 year. The opening basis change comprises predominantly
of R33 million in respect of an understatement of the 2001 transfer to the
long-term insurance fund, and R60 million relating to Commercial Union Life.
The current earnings are therefore reduced by R43 million; however, there is
no impact on the disclosed headline earnings for the current or prior
periods.
NOTE 1 - PREMIUM INCOME 6 mths to 6 mths to 12 mths to
30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Recurring premiums 1 987 1 910 4 087
Individual life 1 533 1 412 3 022
Employee benefits 552 533 1 173
Re-insurance (98) (35) (108)
Single premiums 907 1 691 2 922
Individual life 430 560 1 052
Employee benefits 477 1 131 1 870
2 894 3 601 7 009
Metropolitan Life Ltd 2 302 3 087 5 913
Metropolitan Odyssey Ltd 162 165 329
CU Life Assurance Company of SA Ltd 193 163 359
Metropolitan Life (Namibia) Ltd 154 142 296
Metropolitan Life of Botswana Ltd 83 44 112
2 894 3 601 7 009
NEW AFRICA CAPITAL GROUP RESULTS
NOTE 2 - POLICYHOLDERS` BENEFITS 6 mths to 6 mths to 12 mths to
PAID 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Individual life 1 220 1 224 2 425
Death and disability claims 312 321 634
Maturity claims 272 249 515
Annuities 182 160 325
Surrenders 469 503 976
Re-insurance recoveries (15) (9) (25)
Employee benefits 1 270 1 223 2 068
Death and disability claims 170 135 287
Maturity claims 74 130 230
Annuities 65 26 89
Withdrawal benefits 211 260 247
Terminations 773 687 1 252
Re-insurance recoveries (23) (15) (37)
2 490 2 447 4 493
Metropolitan Life Ltd 1 768 1 358 2 883
Metropolitan Odyssey Ltd 114 107 210
CU Life Assurance Company of SA Ltd 501 888 1 202
Metropolitan Life (Namibia) Ltd 81 78 163
Metropolitan Life of Botswana Ltd 26 16 35
2 490 2 447 4 493
NOTE 3 - INCOME FROM ADMINISTRATION 6 mths to 30 June 2002
BUSINESS
(before tax, goodwill and outside
shareholders)
Revenue Expenses Total
Rm Rm Rm
Health administration 148 127 21
Asset management 60 38 22
Metropolitan Asset Managers 31 20 11
Metropolitan Unit Trusts 9 6 3
Ovation 7 8 (1)
Investment subsidiaries 5 - 5
Property administration 8 4 4
Total income from administration 208 166 43
business
NEW AFRICA CAPITAL GROUP RESULTS
NOTE 4 - ANALYSIS OF HEADLINE 6 mths to 6 mths to 12 mths to
EARNINGS 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Corporate business 40 50 88
Metropolitan Asset Managers 11 8 16
Metropolitan Employee Benefits 30 42 75
Commercial Union Life 3 4 10
Metropolitan Unit Trusts 3 1 2
Investment subsidiaries (7) (5) (15)
Retail business 67 119 128
Metropolitan Life 65 104 108
Metropolitan Odyssey (2) 7 7
Commercial Union Life 4 8 13
International business 6 (11) (12)
Metropolitan Namibia 5 (10) (11)
Methealth Namibia Administrators 1 - 2
Metropolitan Botswana - (1) (3)
Metropolitan Health Group 11 29 17
Shareholders 51 80 158
New Africa Capital (12) - 1
Investment income 89 85 171
Income tax (26) (5) (14)
Headline earnings 175 267 379
Goodwill amortised (25) (20) (42)
Adjustment for 90:10 rule 9 20 35
FSV profit per actuarial balance 159 267 372
sheet
NEW AFRICA CAPITAL GROUP RESULTS
NOTE 5 - FUNDS 6 mths 6 mths 12 mths
RECEIVED FROM Gross Gross Net inflow Net Net inflow
CLIENTS inflow outflow 30.06.2002 inflow 31.12.2001
Rm Rm Rm 30.06.200 Rm
1
Rm
Metropolitan 2 302 1 768 534 1 728 3 030
Life 1 485 862 623 699 1 450
Employee 873 922 (49) 1 030 1 592
benefits
Re-insurance (56) (16) (40) (1) (12)
Odyssey 162 114 48 59 119
Commercial 193 501 (308) (725) (843)
Union Life
Namibia 154 81 73 64 133
Botswana 83 26 57 28 77
Total 2 894 2 490 404 1 154 2 516
premiums/claim
s
Health 1 790 1 789 1 141 359
administration
Asset 2 244 2 248 (4) 908 1 417
management
EB segregated 657 657
annuities
Total funds 7 585 6 527 1 058 2 203 4 292
received
NOTE 6 - ASSETS UNDER 30.06.2002 30.06.200 31.12.2001
MANAGEMENT Rm 1 Rm
Rm
Investment assets 30 655 29 339 31 756
Strategic investments 54 64 45
Goodwill 410 396 375
Equipment and intangibles 223 183 218
Current assets and deferred tax 1 397 1 491 1 432
Total on-balance sheet assets 32 739 31 473 33 826
Unit trusts 833 1 221 1 020
Health administration 1 300 1 300 1 603
Ovation 1 091 872 1 018
Metropolitan Asset Managers 5 241 5 480 4 370
Total assets under management 41 204 40 346 41 837
NEW AFRICA CAPITAL GROUP RESULTS
NOTE 7 - ANALYSIS 30.06.2002 31.12.2001
OF ASSETS BACKING
GROUP NET ASSET
VALUE
Rm % Rm %
Listed equities 2 504 55.9 2 488 48.8
Foreign investments 778 17.4 1 298 25.5
Properties 311 6.9 326 6.4
Fixed interest 143 3.2 241 4.7
Money market 198 4.4 223 4.4
Intangibles 410 9.1 446 8.7
Other assets 138 3.1 79 1.5
Group net asset 4 482 100.0 5 101 100.0
value
Surplus of 767 848
Commercial Union
Life
Net asset value per 5 249 5 949
actuarial statement
EMBEDDED VALUE 30.06.200 30.06.2001 31.12.2001
2 Rm Rm
Rm
Net asset value per 5 249 6 144 5 949
actuarial statement
Adjustment for:
Asset management 147 124 130
Metropolitan Health 51 184 52
Group
New Africa Capital (149)
expenses
Commercial Union Life (909) (1 095) (1 001)
and goodwill
Adjusted net asset value 4 389 5 357 5 130
Net value of in-force 2 378 2 393 2 423
business
Individual life 2 001 1 939 1 977
Gross value of in- 2 116 2 039 2 090
force business
Less: Cost of capital (115) (100) (113)
Employee benefits 377 454 446
Gross value of in- 525 522 570
force business
Less: Cost of capital (148) (68) (124)
Embedded value 6 767 7 750 7 553
NEW AFRICA CAPITAL GROUP RESULTS
EMBEDDED VALUE 30.06.2002 30.06.2001 31.12.2001
Rm Rm Rm
Embedded value per share 1 012 1 066 1 079
(cents)
Adjusted net asset value 656 737 733
per share (cents)
Number of shares in 669 727 700
issue (million)
(net of 41 million
treasury shares;
31.12.2001: 28 million)
The gross value of in-force for individual life includes R72
million, which represents the discounted value of that part of
the New Africa Capital expenses, which will continue to be
recovered by way of policyholder charges.
EMBEDDED VALUE PER Net Value of 30.06.2002 31.12.2001
COMPANY asset in-force Total Total
value
Rm Rm Rm Rm
Metropolitan Life 2 924 1 949 4 873 5 362
Ltd
Metropolitan 142 89 231 236
Odyssey Ltd
CU Life Assurance 208 195 403 396
Company of SA Ltd
Metropolitan Life 130 109 239 210
(Namibia) Ltd
Metropolitan Life 67 36 103 110
of Botswana Ltd
Metropolitan Health 299 51 350 330
Group
Asset management 91 147 238 209
New Africa Capital 621 (149) 472 853
(after
consolidation
adjustments)
Goodwill (142) (142) (153)
Total embedded 4 340 2 427 6 767 7 553
value
Adjustment for 909
Commercial Union
Life and goodwill
Net asset value per 5 249
actuarial statement
NEW AFRICA CAPITAL GROUP RESULTS
ANALYSIS OF CHANGES MHG & Balance 30.06.200 31.12.200
IN Asset of group 2 1
GROUP EMBEDDED managemen Total Total
VALUE t Rm
Rm Rm Rm
Profit from new 31 17 48 165
business
Point of sale 30 16 46 154
Expected return 1 1 2 11
to end of period
Profit from (3) (2) (5) 254
existing business
Expected return 26 179 205 443
Experience (5) (108) (113) (36)
variance -
economic
Experience (24) (73) (97) (153)
variance - non-
economic
Embedded value 28 15 43 419
profit from
operations
Investment return (260) (260) 213
on net worth
Capital gains tax (138)
Changes in (9) (30) (39) 60
assumptions -
economic
Changes in (2) (119) (121) (25)
assumptions - non-
economic
Exchange rate (3) (3) 15
movements
Total embedded 17 (397) (380) 544
value profit
Capital raised 14 14 128
Dividend (161) (161) (108)
Share buy-back and (259) (259) (258)
share issue costs
(Decreases)/increas 17 (803) (786) 306
e in embedded value
Return on embedded (10.1) 7.5
value (%)
NEW AFRICA CAPITAL GROUP RESULTS
VALUE OF LIFE INSURANCE NEW 6 mths to 6 mths 12 mths
BUSINESS 30.06.2002 to to
Rm 30.06.20 31.12.20
01 01
Rm Rm
Individual life 16 (4) (16)
Gross value of new business 20 0 (9)
Less: Cost of capital (4) (4) (7)
Employee benefits 14 41 63
Gross value of new business 18 44 72
Less: Cost of capital (4) (3) (9)
Metropolitan Advisory and Retail (14) - (22)
Services
16 37 25
GROUP INDIVIDUAL LIFE 30.06.2002 31.12.2001
SOURCE OF NEW BUSINESS
APE % Total % APE % Total
%
General intermediary 14 19 30 39
channel
Direct writers 36 31 47 43
Direct mail and 37 19 16 7
telemarketing
MARS - since July 2001 13 31 7 11
VALUE OF NEW BUSINESS PER 6 mths to 30.06.2002 12 mths
COMPANY to
31.12.200
1
Gross Cost of Net Net
Rm capital
Rm Rm Rm
Metropolitan 35 (6) 29 44
Life 17 (3) 14 (20)
Employee benefits 18 (3) 15 64
Metropolitan Odyssey (4) - (4) (8)
Metropolitan Namibia 3 (1) 2 5
Metropolitan Botswana 3 - 3 6
Metropolitan Advisory and (14) (14) (22)
Retail Services
23 (7) 16 25
NEW AFRICA CAPITAL GROUP RESULTS
VALUE OF NON-LIFE NEW 6 mths to 6 mths to 12 mths to
BUSINESS 30.06.200 30.06.200 31.12.2001
2 1 Rm
Rm Rm
Metropolitan Health Group 3 109 83
Asset management 27 29 46
NEW BUSINESS PREMIUMS 6 mths to 6 mths to 12 mths to
30.06.200 30.06.200 31.12.2001
2 1 Rm
Rm Rm
Recurring premiums
Individual life 289 252 484
Gross premiums 334 582
Lapses from inception (45) (98)
Employee benefits 68 71 155
357 323 639
Single premiums
Individual life 430 560 1 033
Employee benefits 477 1 131 1 958
907 1 691 2 991
Annual premium equivalent 448 492 938
(APE)
Lapses as a % of gross 13.5 16.9
premiums
VALUE OF NEW BUSINESS Value of APE* Margin
PREMIUMS AS A % OF new
ANNUAL PREMIUM EQUIVALENT business
(APE) Rm Rm %
Individual life 16 332 4.8
Employee benefits 14 116 12.1
Total 30 448 6.7
* APE represents new recurring premiums (net of lapses at
inception plus 10% of single premiums.
NEW AFRICA CAPITAL GROUP RESULTS
VALUATION OF NON-LIFE Value as Write-up Embedded
SUBSIDIARIES per to fair value
balance value Rm
sheet Rm
Rm
Asset management - share 53 147 200
- loan 38 38
Metropolitan - share - 51 51
Health Group
- loan 299 299
PRINCIPAL ASSUMPTIONS 30.06.200 30.06.200 31.12.2001
2 1 %
% %
Pre-tax investment return
Equities 14.3 13.3 13.8
Properties 14.3 13.3 13.8
Government stock 12.3 11.3 11.8
Cash 10.3 9.5 9.8
Risk discount rate 15.8 14.8 15.3
Investment return (before 13.7 12.7 13.2
tax) - smoothed bonus
Expense inflation rate 8.5 8.5 8.5
LIFE BUSINESS: SENSITIVITY Change in base value of:
OF THE IN-FORCE VALUE AND
THE VALUE OF NEW BUSINESS -
30 June 2002
In-force New business Notes
business %
%
1% Increase in risk (5.0) (23.1) (i)
discount rate
1% Reduction in risk 5.5 26.6 (i)
discount rate
10 Reduction in per policy 6.1 65.0 (ii)
% expenses
1% Reduction in expense 1.8 11.7 (ii)
and salary inflation
10 Reduction in policy 1.5 19.0
% discontinuance rates
10 Reduction in mortality, 14.2 123.6 (ii)
% morbidity and medical
rates
1% Increase in the assumed 7.7 15.4 (iii)
investment return
10 Increase in the premium 1.6 14.2
% indexation take-up rate
(from 70% to 80%)
1% Increase in risk (1.9) (iv)
discount rate impact on
cost of car
1% Reduction in risk 2.3 (iv)
discount rate impact on
cost of car
10 Increase in the number 48.5
% of new business
NEW AFRICA CAPITAL GROUP RESULTS
LIFE BUSINESS: SENSITIVITY OF THE Change in base value
IN-FORCE VALUE AND of:
THE VALUE OF NEW BUSINESS - 30
June 2002
In-force New Notes
business business
% %
Base value before cost of CAR 2 641 24
(rand million)
(i) The risk discount rate appropriate to an investor depends
on the investor`s own requirements, tax position and
perception of the risk associated with the realisation of
the future profits of New Africa Capital and its
subsidiaries.
(ii) No corresponding changes in variable policy charges are
assumed, although in practice it is likely that variable
charges will be modified according to circumstances.
(iii Bonus rates are assumed to change commensurately.
)
(iv) A change in the risk discount rate also has a noticeable
effect on the cost of holding the required CAR levels.
Other sensitivities above are shown before cost of CAR.
STOCK EXCHANGE PERFORMANCE 6 mths to 6 mths to 12 mths to
30.06.2002 30.06.2001 31.12.2001
Value of shares traded 1 193 1 050 2 472
(rand million) *
Volume of shares traded 167 115 273
(million) *
Shares traded (% of total 49.9 31.6 39.0
shares in issue)
Trade prices (cents per
share)
Highest 902 1 060 1 060
Lowest 520 765 650
Last sale of period
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