Keeping it uncomplicated

03 March 2004 Angelo Coppola

The Liberty group released its 2003 results, and it was the first presentation on a full year's results for Myles Ruck, chairman Derek Cooper, and chief financial director Deon de Klerk.

"We are reasonably happy with the numbers under the circumstances," says Ruck. "Although the spate of new legislation takes a lot out of the business, and while there is a strong need for it, it is distracting," says Ruck. "The perception of the industry is not good at the moment. This has to be addressed, and we will focus on customer education, better selling and good performance. Service is an issue, and this has to be copped with professionally." "People look for a reason when performance is not good," says Ruck.

They have also appointed an internal ombudsman, which is not a new idea.

"Headline earnings are down, as the group was affected by implementation of AC133. Expect volatility for the foreseeable future as there are still no international accounting standards for insurance businesses."

"Get the value add right for the customer and the shareholder benefit will follow," says Ruck.

There was a fair value adjustment which was primarily around Properties, Ermitage, Stanlib, and the carrying the value of in-force business acquired from IEB, valued at R122m. "This is not a sudden change," says Ruck.

CAR was down a little, caused by Charter Life, and due to their foreign business and the rand guarantees in place. The rand strength meant some adjustments, and this had a 10% effect on CAR. "It is not life threatening though."

"We are over-capitalised, and aware of it. Be patient," says Ruck

* Headline earnings were down 11.1% - from R577.9m to R513.6m
* Total earnings per ordinary share were up 5.8%
* Final dividend per share 116
* Capital adequacy ratio down from 3x to 2.6x
* Total assets, including reserves and liabilities grew to R96 599.6m from R86 263.5m
* Operating profit from insurance operations was down 19.1%
* Revenue earnings attributable to shareholders was up 25.6%
* Shareholders funds increased from R4 670m to R4 754.8m
* Value of new business flat at R608.9m
* New business margin was fixed at 20%
* Total expenses up 10% at R1 860.9m
* Fair value adjustment on embedded value dropped 36% to R540.9m, from R838.1m
* Net value of life business in force was up 14% at R6 493.8m

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