Liberty chief executive David Munro. 
Photo: Timothy Bernard/African News Agency (ANA)
Liberty chief executive David Munro. 
Photo: Timothy Bernard/African News Agency (ANA)

Liberty Holdings under ‘strict discipline’ to manage expenses

By Edward West Time of article published May 20, 2019

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JOHANNESBURG - Liberty Holdings’ new insurance business volumes remained under pressure in the first three months of 2019, while the Liberty Corporate and Liberty Africa Insurance operations saw an improvement in business inflows.

The “intense focus” on addressing the mix of new business volumes and margin across all business lines was continuing, together with “strict discipline” in managing the expense base, the group said in a three-month operational update to March 31 on Friday.

Liberty Holdings’ share price closed 0.47percent higher at R102.73 on the JSE on Friday after the operational update was released, indicating shareholder support, given that the life insurance index was down 1.3percent at the same time.

At Stanlib, an improved investment performance continued to support third party client cash inflows, while favourable financial market conditions contributed positively to shareholder investment returns.

Liberty’s management said the group was well capitalised - the Solvency Capital Requirement was at much the same level as on December 31, 2018.

At the SA Retail insurance operations, new business sales of R1.52billion was 1percent above the three months to March 31, 2018.

Recurring premium new business sales were 4percent above the comparative period, while single premium business decreased.

Net customer cash outflows of R252million were below the comparative period inflows of R514m, due to lower single premium new business.

At Liberty Corporate indexed new business of R209m was 22percent above the first quarter of 2018, with recurring premiums new business up by 23percent.

Single premium new business was up 12percent on the comparative period.

Net cash outflows reduced to R173m compared to R278m in the comparative period, due mainly to increased single premium umbrella sales, and lower umbrella scheme member withdrawals.

At Stanlib South Africa, assets under management amounted to R576bn, compared to R549bn at December 31, 2018.

Net external third party client cash inflows increased to R7.8bn from R2.5bn, supported by increased flows from retail and institutional clients.

Non-money market net cash inflows grew to R3.7bn from R1.5bn and money market net cash inflows increased to R4.1bn from R1bn.

Intragroup cash inflows for the period amounted to R2.6bn.

Indexed new business at Liberty Africa Insurance increased to R101m from R62m, reflecting new business growth with a shift in mix towards more recurring premium business.

Assets under management in Stanlib Africa came to R51bn, unchanged from December 3, 2018, with net external third party client cash outflows of R800m, reflecting a reduction compared to outflows of R6.6bn in the first quarter of 2018.

“We expect the South African economic environment to remain subdued for most of 2019. However, we remain confident that our focus is on the right areas of the business to create value for all stakeholders,” the management said.


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