Liberty's rise in headline earnings was mainly due to better market returns from the Shareholder Investment Portfolio. Photo: Simphiwe Mbokazi/African News Agency (ANA)
CAPE TOWN – Assurance and investments group Liberty Holdings’ normalised headline earnings a share increased 51.1 percent to R2.01 billion in the six months to June 30 and its chief executive is even talking about regaining the leading position in the retail affluent market.

”Our strong operational performance supported by improved market returns shows the continued progress we are making towards re-building a competitive and sustainable business,” chief executive David Munro said on Thursday.

“I believe Liberty is on track to reclaim our leading position within the retail affluent market, which is highly geared towards any upswing in the South African economy,” he added.

The market seemed to react favourably – Liberty’s share price increased 1.45 percent to R110.22 at one point, while the JSE’s life insurance index was down 0.53 percent. Later in the day, the share closed at R109.80.

The interim dividend was maintained at 276 cents a share.

Munro said “good” progress was being made with Liberty’s turnaround strategy.

“Management's focus for 2019 remains on driving the SA Retail performance and value of new business growth, maintaining Stanlib’s investment performance in the top quartile, concluding outcomes for each of the group's operations under review and continuing to maximise our relationship with the Standard Bank Group.”

The rise in headline earnings was mainly due to better market returns from the Shareholder Investment Portfolio (SIP).

SIP’s performance was attributable to the strong performance of local equities in the first six months, with good performances from other emerging and developed market equities, as well as local bonds.

SIP produced a gross return of 5.9 percent and delivered earnings of R922 million, substantially higher than R374m at the same time last year.

Munro said they expect market volatility in South Africa and in developed markets to continue.

Steps to strengthen the operations in the past six months included initiatives to simplify and re-orientate the business, to better serve financial advisers and clients, in a digital, and as part of the Standard Bank Group, said Munro.

Some product innovations included repositioning the flagship Lifestyle Protector risk proposition, launch of the Liberty Wellness business, launch of the Advanced Global Equity T2 portfolio and the enhancement of the Liberty Corporate Investment and Annuity proposition.

Normalised operating increased 13 percent to R1.09 billion. The group value of new business increased 20.4 percent to R171m.

Munro said the group was not immune to economic headwinds and priorities were to improve the volume and value of new business through product enhancements, a differentiated technology strategy and managing costs.

Group long-term insurance indexed new business of R3.86bn was 2.4 percent above the comparative period, with the focus on sales efforts and new business volumes in a tough consumer environment.

Liberty’s Africa regions, comprising Liberty Africa Insurance and the Stanlib asset management operations in Southern Africa, benefited from a return to expected claims experience from the short-term insurance business in Kenya.

The Bancassurance agreement with Standard Bank Group continued to make a positive contribution to new business volumes and earnings.

Death and disability payments to clients in the first half increased by 6.9 percent to R5.8bn, and annuity payments increased by 8.6 percent to R3.9bn.