LONDON, Aug. 7, 2001 (PRIMEZONE) -- Mutual & Federal Insurance Company Limited ("Mutual & Federal")(MAF.J), the South African general insurance group in which Old Mutual plc ("Old Mutual") has a 51% interest, has today issued its interim results for the six months ended June 30, 2001.
The company commented:
"The net income for the six months ended 30 June 2001 includes the results of CGU, which was formally acquired in October 2000 and consolidated from that date. The integration of the CGU activities has progressed well and will be complete by the end of the year.
"The General Insurance Result of R104 million, which includes an underwriting surplus of R28 million, represents an encouraging improvement on 2000. This result is largely attributable to an increase in rating levels and an absence of substantial weather-related claims, which characterized the first quarter of 2000.
"There were, however, a number of significant fires during the period, which severely impacted the property portfolio. There has been a return to profitability in the accident, engineering and marine portfolios, but the incidence of motor vehicle accidents and theft remains high, and corrective action is being taken to ensure a return to profitability on the motor account.
"Headline earnings increased by 14%. This is particularly encouraging in view of the special dividend of 300 cents per share declared in November 2000, which had the effect of reducing shareholders' funds by approximately R800 million. The solvency margin remains strong and was in excess of 100% at 30 June 2001.
"The Board is cautiously optimistic about the prospects for the balance of the period in light of the improvement in the underwriting cycle. It should, however, be noted that short-term insurance results fluctuate and the outturn for the first six months is not necessarily indicative of the likely results for the remainder of the year.
"A maintained interim dividend of 22 cents per share has been declared payable to shareholders in respect of the six months to 30 June 2001."
The full text and table of results of the Mutual & Federal announcement is available on the Stock Exchange News Service (SENS), and has been drawn up in accordance with South African Generally Accepted Accounting Practice (GAAP). The results will be consolidated in the interim accounts for Old Mutual in accordance with UK GAAP. Old Mutual will release its interim results on 4 September 2001.
Commenting on Mutual & Federal's results, Julian Roberts, Group Finance Director of Old Mutual said:
"Mutual &Federal has made substantial progress in the first half of 2001, achieving a positive underwriting result contributing towards a healthy increase in profit. The integration of the CGU activities has progressed well and will be complete by the end of the year."