RMIH - "“A satisfying outcome that bodes well for the future”

“A satisfying outcome that bodes well for the future”

GT Ferreira – Chairman

Rand Merchant Insurance Holdings – unbundled from RMBH in March 2011 – holds strategic investments in some of SA’s premier insurance brands:

· health and life assurer Discovery (25%)
· life insurer MMI Holdings (26%)
· personal lines insurer OUTsurance (90%) and
· specialist insurer RMBSI (76%)

The maiden financial report of Rand Merchant Insurance Holdings only includes income from the underlying investments for the four months to end June 2011.

FINANCIAL HIGHLIGHTS

All RMI Holdings’ investments produced excellent results, with strong positive to exceptional growth being recorded in normalised earnings for the full year:

* MMI + 12% to R 2 588 million
* Discovery + 31% to R 2 028 million
* OUTsurance + 39% to R 807 million
* RMB-SI >100% to R 92 million

Key take outs -

Despite the potential distractions of its ongoing merger integration, MMI’s outcome reflects strong new business growth.

All Discovery’s businesses performed better than expected and it achieved considerable success in the context of growth, innovation and quality across all areas of its business.

The key drivers behind OUTsurance’s growth were a favourable claims environment, double digit premium growth and a significant decrease in Youi’s start-up loss.

Rand Merchant Insurance Holdings reported normalised earnings of 128,4 cents per share against which it paid a 2,3 times covered dividend of 56,5cents per share.

Ferreira comments, “…The restructuring of the RMBH group into focussed, separately listed banking (via RMBH) and insurance (via RMI Holdings) groups give shareholders greater flexibility and transparency in managing their investment in the group”.

“While we expect that domestic economic conditions will remain subdued in the current financial year the quality of our operating franchises and their respective strategies domestically and outside South Africa should underpin the group’s ability to provide us, as shareholders, with sustainable superior returns over time.”