Zurich Insurance Company South Africa reports satisfactory financial results for the six months ended 30 June 2011

Zurich’s half-year results demonstrate a continued focus on improving the underlying profitability of the Company.

· Interim dividend declared

· Ongoing underwriting actions impact business volumes but benefit claims costs

· Business well positioned for controlled growth strategy

Whilst the results have been impacted by a decline in business volumes of 14% to R2.1 billion (2010: R2.4 billion) they are reflective of ongoing actions taken to improve underwriting profitability and challenging market conditions.

These actions, alongside the implementation of a number of claims initiatives, have positively impacted the cost of claims which, at R1.1 billion, reflect an 18% improvement from R1.3 billion in the prior period, despite major weather-related losses in the first quarter of the year.

Expenses have been well controlled and reflect the benefits from the business transformation programme in 2010 and additional initiatives undertaken in the first half of the year.

The general insurance result is a surplus of R30.9 million (2010: R54.7 million) and the underwriting result reflects a deficit of R11.6 million (2010: R10.8 million surplus).

Commenting on the results, Chief Executive Officer, Guy Munnoch, said: “The decline in our underwriting result was expected due to lower premium volumes, however, we expect to improve our performance through the delivery of a focused growth strategy which will flow into 2012.”

Turning to investments, Munnoch said: “The volatility experienced in the equity markets during the first half of 2011 combined with a low interest rate environment, continued to impact our investing activities. However, tighter cash flow management and proportionally higher technical reserves facilitated a satisfactory performance.”

Non-technical expenses have reduced by 83% in comparison to prior year, predominantly as a result of the cost of the business transformation programme being absorbed in the results for 2010.

Munnoch concluded: “Going forward, we will continue to invest in enhancing our propositions and service and, in the second half of the year, we will be launching a number of new initiatives to the benefit of brokers and customers.”