Despite a rise in claims related to motor vehicle accidents, South African insurer Mutual & Federal reported an 18% increase in operating profit for 2005. Mutual & Federal is majority owned by Old Mutual.
For the year ending December 31, 2005, headline earnings per share increased 22% to ZAR0.56. Gross premium income rose 9% to ZAR8 billion from last year. The final dividend for ordinary shares for the year was lifted 48% to ZAR1.55. Growth in the value of listed equities helped boost investment income and market conditions helped underwriting profitability.
The company said in a statement: Although there were a number of large commercial and industrial claims the commercial division generated a most satisfactory result. The personal division was however adversely impacted by a number of severe storms and aggressive competition. In addition, the motor account was negatively affected by an increase in the incidence of motor vehicle accidents and higher repair costs.
Mutual & Federal said that the financial results for the year were pleasing with the underwriting and investment activities both delivering most satisfactory performances.