Interim results june 2000
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Interim results June 2000. Highlights. + 22% + 23% +58% + 3% + 121%. New business Value of new business Bancassurance new business Claims & policyholder benefits Net c ash flow from insurance operations. Highlights. + 10% +3% + 22%. EPS and DPS Embedded value

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Interim results June 2000

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Interim results june 2000

Interim results June 2000


Highlights

Highlights

+ 22%

+ 23%

+58%

+ 3%

+ 121%

New business

Value of new business

Bancassurance new business

Claims & policyholder benefits

Net cash flow from insurance operations


Highlights1

Highlights

+ 10%

+3%

+ 22%

EPS and DPS

Embedded value

Sale of interest in Liberty International – premium


Revenue e arnings continuing o perations

Revenue earnings –Continuing operations

30.6.00

(Rm)

30.6.99

(Rm)

%

Change

Life fund operating surplus

Revenue earnings – shareholders’ funds

Headline earnings

Headline EPS (cents)

DPS (cents)

516

204*

720

265,9

133,0

519

133

652

242,7

120,9

(1)

54

10

10

10

* Includes interest R122m


Net c ash i nflows of i nsurance o perations

Net cash inflows ofinsurance operations

30.6.00

(Rm)

30.6.99

(Rm)

%

Change

Single premiums

Recurring premiums

Total premiums

Claims & policyholder benefits

Net cash flow

3119

2799

5918

4861

1057

2665

2514

5179

4700

479

17

11

14

3

121


New b usiness

New business

%

Change

Total

Recurring

Single

Index

Present value of profits

+22

+25

+21

+24

+23

Reasons:Product innovation

Growth in sales force

Bancassurance (no longer vulnerable)


Agency headcount 1995 june 2000

Agency headcount1995 – June 2000

1592

1310

1135

970


Bancassurance

Bancassurance

30.6.00

(Rm)

30.6.99

(Rm)

%Change

New business premiums ex Stanbic

632

400

58

  • Number of funeral policies in-force – 120 000

  • Funeral policies* +100%

  • Loan protection policies* +41%

  • Improved penetration of banking customer base, but

    slower than we plan for

  • * Period 1 January 2000 – 30 June 2000


Life fund operating surplus investment r eturns

Note:Main portfolios in first quartile of performance

Life fund operating surplus –Investment returns

JSE

All Share

%

Liberty

Equity

%

1999 – first half

2000 – first half

1999 – second half

2000 – second half

+31,6

-8,7

+22,6

?

+30.1

-4,6

+26,7

?


Taxation

Taxation

30.6.00

(Rm)

30.6.99

(Rm)

Life fund

Corporate

Secondary tax

125

35

29

189

14

5

25

44


Embedded v alue

Embedded value

30.6.00

(Rm)

31.12.99

(Rm)

%

Change

Shareholders’ funds

Value of life business in force

Adjustment to financial services subsidiaries

Value per share (R)

8979

4395

881

14255

52,63

9092

4756

n/a

13848

51,25

(1,2)

(7,6)

2,9

2,7


Present value of new business profits

Present value of new business profits

30.6.00

(Rm)

30.6.99

(Rm)

%

Change

Value of new business

208

169

+23

  • Notes:

    • Calculated on new tax basis

    • Comparative figure not restated for increased

      LIBAM charges

    • Margins maintained


Financial s ervice s s ubsidiaries

Financial servicessubsidiaries

  • Libam operating profit up from R7 million toR29 million

  • Positive inflow to unit trusts up to R1363 million from R227 million

  • Healthcare membership lower than target at 18 815 principal members – costs managed accordingly


Shareholder s f unds

Shareholders’funds

30.6.00

(Rm)

31.12.99

(Rm)

996

2628

1 933

330

365

5 355

2 790

1 559

(1 531)

2 537

8 979

956

4700

2 482

688

1 235

295

3 436

2 096

646

(1 557)

2 251

9 092

Financial services activities

Listed investments

  • SAB

  • Metro

  • Liberty International

  • Other

    Other investments

  • Cash

  • Due iro GNI

  • Proceeds of Liberty International

  • Convertible bond (net of cash)

  • Other

    TOTAL


Sale of i nterest in liberty international

Sale of interest in Liberty International

  • In line with focus on financial services

  • Premium to market price achieved - 22%

  • Negative gearing on convertible bond eliminated

    • Bond payable September 2004 (Rm) 1 807

    • Cash held offshore 1 811


Summary of cash position

Summary of cash position

R billion

2,79

1,81

4,60

1,50

0,87

2,37

For shareholders

  • South Africa

  • Offshore

    • Security for convertible bond

      For policyholders – ex sale of Lib Int

  • Remitted to South Africa

  • Held offshore


Progress with strategies

Progress with strategies

  • Deployment of capital

    • Disposal of interest in Liberty International

    • Options for deployment of cash resources being evaluated “with discipline”

    • Focusing on core financial services

  • Focus on upper income market

    • Satisfactory new business volumes from this market segment


  • Progress with strategies1

    Progress with strategies

    • Leverage LIBAM’s research

      • Innovative and successful products brought to the market and planned

      • Expanding product range for Liberty and Liberty Unit Trust

  • Expand corporate benefits

    • New business up 85%


  • Progress with strategies2

    Progress with strategies

    • Achieve critical mass in Liberty Healthcare

      • The healthcare environment has become restrictively regulated

      • Future profits dependant on regulatory certainty

  • Acquire distribution for emerging market

    • Strengthened bancassurance relationship will be prime channel for access to the emerging market


  • Progress with strategies3

    Progress with strategies

    • Structures to deliver offshore products

      • New structures to enhance offshore products are being implemented

  • Develop an e-commerce offering

    • MyLife.co.za to be launched in September 2000


  • Prospects

    Prospects

    • FSV profits for the second half of the year are dependant upon the performance of the investment markets

    • Revenue earnings on shareholders’ funds are dependant upon deployment of cash

    • Embedded value is also geared to investment markets


    Conclusion

    Conclusion

    • Good progress on issues under management control

      • New business

      • Bancassurance

      • Management of in-force business

      • CRM and customer service

      • Relative investment performance

      • Recruitment


    Conclusion1

    Conclusion

    • Focus on financial services further improved

    • Employment of capital a priority

    • Ready for upturn in markets


    Questions

    Questions


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