2014 ANNUAL REVIEW - NEW HORIZONS - SAIA

 
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
NEW
HORIZONS

 2014
ANNUAL
REVIEW
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
SAIA ANNUAL REVIEW 2014

     Content2014
 1   SAIA Vision and Mission .........................................................................           2
 2   Message from the Chairman .................................................................                 4
 3   Message from the Chief Executive .........................................................                  6
 4   Widening the horizon on Transformation and Social Risks .........................                          18
 5   Governance Risks: Levelling the playing fields ...........................................                 22
 6   Reinsurers .............................................................................................   28
 7   Solvency Assessment and Management ..................................................                      30
 8   Insurance Risks ......................................................................................     34
 9   SAIA Finance and Operations ..................................................................             42
10   The Association of Marine Underwriters in South Africa .........................                           44
11   The South African Machinery Insurers’ Association .................................                        48
12   SAIA Highlights ......................................................................................     51
13   Membership ..........................................................................................      54
14   Beyond the horizon ..............................................................................          60

                                                                                                    NEW HORIZONS n SAIA l 1
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
SAIA vision
                  To promote and represent the interests of the short-term insurance
                  industry, while leading and enhancing the efforts of the industry to
                  become recognised and trusted as an important contributor to the
                  South African economy and society.

2 l SAIA n NEW HORIZONS
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
SAIA ANNUAL REVIEW 2014

SAIA mission
• To encourage fair and ethical treatment of consumers of short-term
  insurance products.
• Representing the short-term insurance industry with all stakeholders
  and at all levels in such a way that these stakeholders have trust and
  confidence in the industry.
• Creating an environment in which the members of our industry can
  share information, debate important and relevant issues and create
  a common vision for the short-term insurance industry.
• Creating opportunities for the industry to continue with and embark
  on initiatives that will enhance its image and reputation among all
  stakeholders.
• Promoting understanding of short-term insurance to all
  stakeholders.
• Promoting awareness of the industry and its contributions to society
  and the South African economy.

                                                                     NEW HORIZONS n SAIA l 3
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
,,            A rocket will never be able to leave the earth’s atmosphere.
                                     - New York Times 1936
                                                                                  ,,

4 l SAIA n NEW HORIZONS
2014 ANNUAL REVIEW - NEW HORIZONS - SAIA
MESSAGE FROM THE CHAIRMAN

                              NEW
                       horizons
T
         he world has changed. In particular, the way the global     Finally, and most practically, there should be wider acceptance
         financial services sector is structured is undergoing       of the validity of the Pareto 80/20 rule. Most of the benefits
         fundamental and irreversible change. However,               of the proposed regulatory changes can be derived fairly
change brings with it not only risk but also opportunity. This       predictably by means of a few absolutely key pieces of
year’s theme of New Horizons therefore aptly captures the            legislation supported by a well-structured set of regulations
role of change as the defining theme of our times.                   and do not require the introduction of numerous legislative
                                                                     instruments.
In the aftermath of the financial crisis of 2008 the pragmatic
common-sense approach to reform has become a head-long               Engagement on these issues is particularly important in
rush. Worldwide, the insurance sector has not managed to             respect of the short-term insurance industry because it plays
convince regulators that insurers exhibit fundamentally different    a foundational role in the success of any economic system
risk profiles from banks and do not generate the systemic            that involves the assumption of risk in expectation of a return.
risks that are characteristic of the modern banking system.          Economic enterprise is simply inconceivable in the absence
Unfortunately, policymakers have overreacted significantly and       of a mechanism by which risk can be accurately priced and
are set on a path that will impose inappropriate “bank-like”         efficiently transferred.
regulation upon the insurance sector, which, across the globe,
is beginning to identify future regulatory change as the number      We must therefore grasp the opportunity that still remains to
one business risk, outstripping even cybercrime.                     communicate our bona fides on the concerns outlined above.
                                                                     In this regard the SAIA Board is fully intent on raising our levels
Closer to home, within our own motor insurance industry, it is       of engagement with policymakers, legislators, regulators and
arguably the alarming weakening of the rand against the major        broader society. The SAIA must make its contribution towards
currencies that represents the most immediate threat. While          the entrenchment of a vibrant short-term insurance industry
our industry is for the moment absorbing most of the huge            characterised by increased levels of efficiency, enhanced
increases in the costs of replacing parts in damaged vehicles this   financial soundness and a value proposition that is both
is of course not sustainable in the longer term.                     sustainable and fair towards our customers.

However, all is not doom and gloom. Possibilities such as            In putting together this Chairman’s report I am well aware
making Motor Third Party Property Damage cover compulsory            of my reliance on the goodwill of others, including that of
or introducing micro-insurance legislation, which will assist in     our previous chairman of many years, Ronnie Napier. I must
the expansion of insurance cover to low-income households,           therefore express my deep appreciation for the generous
are examples of the potential for growth that could result from      support I have received from many quarters. Not least of
a balanced approach to regulatory change.                            these are members of the SAIA Executive Committee and
                                                                     the Board who have helped me to get up to speed on the
To achieve this balance there needs to be recognition in the         numerous issues with which we are engaged as an industry.
first place that the risk represented by poor and inefficient
implementation is a risk we should not accept. For the South         Under the leadership of Barry Scott, our executive team
African economy, this particular risk is exacerbated by the sheer    is working hard on all the concerns and priorities raised by
volume of highly technical work to be done in an environment         members, as is evident in the Chief Executive’s report. There
where such skills are in very short supply.                          is of course much that still has to be achieved but I have every
                                                                     confidence that the work being done at SAIA will soon prove
Secondly, a rigorous approach needs to be taken in respect of        its worth.
the economic impact assessments of regulatory interventions.
These need to be carried out early enough to inform the              Themba Gamedze
process of developing detailed new legislation.                      SAIA Chairman

                                                                                                        NEW HORIZONS n SAIA l 5
,,             The Americans have need of the
                       telephone, but we do not.
                   We have plenty of messenger boys.
                                                          ,,
                  - Sir William Preece, Chief Engineer,
                         British Post Office,1878

6 l SAIA n NEW HORIZONS
MESSAGE FROM THE CHIEF EXECUTIVE

                                         everchanging
                       HORIZONS
T
         he challenges facing the short-term insurance industry     five emerging markets. We have been granted membership
         in South Africa are constantly evolving. In order to       of these “clubs” because we are the most influential economy
         meet this everchanging environment, organisations          in Africa. While we may enjoy the benefits that membership
such as the South African Insurance Association (SAIA) need         of these grouping brings us, the flip side of this coin is that
to evolve.                                                          lawmakers need to bring the level of our financial regulation
                                                                    up to the standard of the largest economies in the world.
For this reason, we regularly re-evaluate our role, with specific
reference to our key strategic areas. This was done as recently     For example, we regularly undergo Financial Sector
as the fourth quarter of 2013, at which time the SAIA Board         Assessment Programme reviews, performed by the World
agreed on a new set of key strategic areas, and revised the         Bank/IMF, which produces scorecards indicating where
structure of the Board Committees in order to meet these.           policymakers need to improve. Similarly, our Financial Services
As of November 2013, the SAIA key strategic areas are:              Board is on the executive of the International Association of
• Governance Risks (including legislation and regulation)           Insurance Supervisors, which has twenty-six Insurance Core
• Insurance Risks (including motor, property, agriculture,          Principles for regulators, which need to be complied with.
    marine, engineering)
• Transformation and Social Risks (including image and              So, in order to achieve this, South Africa has embarked upon
    reputation and human capital development)                       a rapid modernisation of our regulatory regime. So far, so
• Reinsurers                                                        good! However, this is being done at a pace far faster than
                                                                    the larger economies implemented this change. We recognise
The main body of this Annual Review covers the activities           that the SAIA and other industry associations active in the
of the SAIA over the last year in detail. My message will           sector are probably as large as the sector can realistically
therefore be confined to placing the role of the SAIA into the      afford, yet we are in many cases only 1/10th of the size of
context of the environment in which we find ourselves, and          the insurance associations in the other G20 states. Insurance
giving some thoughts about the future.                              Europe, the European confederation of insurance associations,
                                                                    where Solvency II was originally designed, represents
Our theme “New Horizons”                                            national associations, which collectively employ more than
                                                                    one thousand people. Whereas Solvency II will have taken
Each year we choose a theme for our Annual Review which             fourteen years in Europe, we have caught up in six, and will
reflects management’s perspective of the position in which we       now launch simultaneously with Europe.
find ourselves. This year our theme of “New Horizons” was
chosen because in many areas much of the groundwork has             So, for a relatively small association like the SAIA, this pace
been done, and we can now literally see the goalposts.              of legislative change represents a tsunami of legislation, far
                                                                    beyond which we can comfortably address. We are well
‘Tsunami’ of Legislation and Regulation                             aware that the use of “tsunami” does not sit comfortably with
                                                                    all, but the term has now become part of the local vocabulary,
I am often asked why it is that the South African financial         so we use it without apology.
services sector is going through such an all-encompassing
programme of regulatory reform, and why it is that the SAIA is      Similarly, for our members, the compliance challenge has
not doing more to challenge these reforms.                          become a massive burden. In my member visits to CEOs,
                                                                    the lament most often heard is that CEOs, especially of small
The answer is really quite simple! South Africa is a member         to medium-sized companies, now spend in excess of 50% of
of the G20 group of nations, despite not being among the            their time dealing with compliance. This detracts from their
largest twenty economies. Similarly, we are members of the          ability to deal with underwriting challenges, marketing their
BRICS grouping, again despite not being one of the largest          products and growing their businesses.

                                                                                                      NEW HORIZONS n SAIA l 7
Of course, this also comes at a cost. While not solely due          There are particular unique challenges for the insurance
to compliance, if one analyses the costs of doing insurance        sector in terms of the FSC, these being access to insurance
business over the last six years, costs plus commissions have      and enterprise development. These are over and above the
increased from 25% of premium to 32% of premium for                other imperatives such as work-place transformation. We
typical insurance. This 28% increase has certainly placed          need to work in partnership with government institutions in
underwriting margins under pressure, with this increase of         order to realise the objectives put in place through the Code.
course coming straight out of the underwriting margin and
ultimately being passed on to consumers.                           The access to insurance aspect has proven to be particularly
                                                                   difficult for insurers, which are expected to sell products in
So for 2014 most of the existing initiatives will continue,        markets with which, in most cases, they are not familiar.
with final implementation being in the not too distant future.     There is no ready-made intermediary network in place,
However 2014 is the crucial year for us to get it right!           especially in the areas where the products need to be sold.
                                                                   There are also some legislative challenges, around the FAIS
Some of the more important issues that will require our focus      area, and the failure of the legislative process to address
during the year are:                                               the much-awaited Microinsurance Bill (which we now
• Solvency Assessment and Management (SAM)                         believe will no longer be addressed through a specific bill). A
• Treating Customers Fairly                                        Microinsurance Bill would have allowed composite insurers,
• Twin Peaks, with the concomitant challenges to “Who              with less rigorous solvency and FAIS requirements. Again, we
   regulates what?”                                                need to work with government in order to identify factors
• Retail Distribution Review                                       inhibiting the growth of this market and remove any barriers.
• BRICS Reinsurance Project
• Policyholder Protection Scheme, which will see a fund            In the area of enterprise development, the DTI-led
   being developed in order to protect consumers in the            discussions around the motor body repair industry continue,
   event of the failure of an insurer                              with progress being made at last. There is pressure for
• Third-party Cell Captive Review                                  the industry to play more of a role in the development of
• Ongoing binder regulation issues                                 black suppliers, in particular around the MBR industry, and
• A review of the ombudsman landscape                              increasingly in the building trade. We have previously shied
                                                                   away from creating our own enterprise development fund at
There is a bottleneck on the legislative programme in              the SAIA, but this possibility now needs urgent attention. As
Parliament, which does not help, and which brings with             an alternative, we are looking at developing a relationship with
it additional time pressures. In addition, as a result of the      the ASISA enterprise development fund and kick-starting a
upcoming national elections to be held in May 2014,                collective approach to enterprise development.
including the process to elect a new National Assembly and
provincial legislature in each province as well as Parliamentary   We will continue with our flagship consumer education
Committee Members, the parliamentary schedule will be              project, which has now provided more than R56 million to
challenging.                                                       basic financial literacy education.

As a result, we anticipate 2014 being a year of tight deadlines,   It has become increasingly obvious that the push to transform
with lots of pressure to get submissions done in a relatively      the workplace needs a boost. For this reason, we have
short time.                                                        initiated a project which has brought in the FIA and IISA to
                                                                   address the industry Human Capital Development challenges.
Transformation                                                     2014 should see major progress in terms of this project.

In discussions with government and other stakeholders it           Insurance Risks
becomes clear that there is a sense of frustration with the
slow progress of transformation in the sector. The much-           Our Board has recognised that the underwriting results in
awaited Financial Sector Code (FSC) was finally gazetted in        the industry have come under pressure of late, and that we
2012, and is now in force, the standards have been finalised       need to do something to address this. The Board agreed
and the training for the industry is complete. However, much       that we need a specific focus on the underwriting areas and
needs to be done to achieve the objectives of the Code.            accordingly created a new Board Committee called Insurance
                                                                   Risks. This new portfolio carries many challenges, as we need
Furthermore, while the old Financial Sector Charter was a          to consolidate much of the work previously done under a
voluntary commitment and companies could instead choose            variety of portfolios.
to report against the generic codes, the industry code is now
part of the legislated transformation environment. This also       The new portfolio includes, among others, Motor, Property,
brings the intermediaries into the FSC for the first time.         Agriculture, Marine, Construction and Machinery.

8 l SAIA n NEW HORIZONS
Some of the specific projects for 2014 and onwards include:          assessment of our efficiency. It is proposed that this review
• The Green Geyser project, which seeks to see one                   be completed in time for a strategy session of the SAIA Board
  million insurance replacement geysers being installed              planned for September 2014.
  as alternatives to electrical geysers. This project has
  seemingly remained dependent in its initial stages upon            Being at the helm in the past 20 years
  government funding, perhaps through Eskom. However,
  with this funding now seeming unlikely, we need to find an         In March 2014 I celebrated 20 years’ service as the Chief
  innovative way for this project to proceed.                        Executive of the SAIA. I took over this position at a time
• Sustainability of motor insurance is still an issue, with          when the organisation was in serious disrepute with its Board,
  the need for compulsory third-party motor property                 members and stakeholders, and we had to embark on a
  insurance, and certainly the need to address road safety.          vigorous programme to restore the credibility of the SAIA.
  We expect to see major progress on these initiatives               During this period, South Africa was heading towards its first
  during 2014.                                                       post-apartheid election, and the start of a period of enormous
• Sustainability in the property portfolio, including issues         change for the country. This was a time when the country as a
  related to climate risk, and the looming problem of acid           whole was looking to a new horizon.
  mine water
• Sustainability of agricultural insurance and specifically multi-   I often remind my colleagues that the SAIA doesn’t have a
  peril crop insurance and the related challenges with regard        tangible product that it sells and that as an organisation we are
  to food security, especially the need to extend insurance          nothing without our employees. While we have a Board and
  cover to emerging farmers                                          many committees which provide us with guidance, it is the
                                                                     management and employees of the SAIA that must provide
Technology Projects                                                  the glue to keep the organisation together. The intellectual
                                                                     capital of the organisation is locked up in the expertise of
After many years of incubation the short-term insurance data         our colleagues and they create the organisation’s institutional
switch STRIDE is ready and open for business. This is an             memory.
essential element of the compliance need contained in the
binder regulations. The users of STRIDE have themselves              In contemplating my 20 years’ service, I am reminded that the
struggled to implement the system changes required to                success of the organisation is solely built by the people who
use STRIDE; this includes both insurers and intermediaries.          have served the organisation.
2014 will be a watershed year for STRIDE, and usage needs
to reach a level which makes it economical for STRIDE to             I wish to give a heartfelt thanks to Ronnie Napier, our long-
continue.                                                            serving Chairman who stepped down from the Board in
                                                                     2013. Ronnie joined the SAIA Board in March 1994, the
While bringing STRIDE to fruition is the obvious key issue,          same year that I joined the SAIA. Ronnie has been an integral
there are ongoing data quality issues in the industry. An            part of my journey in the past 20 years at the SAIA. During
extremely important initiative not only for compliance reasons       his tenure as Chairman, he became a friend and mentor, and
but which would enable many industry initiatives is the ability      provided the SAIA with invaluable assistance, leadership and
to centralise data, which is addressed by the Finance and            advice. Ronnie’s wise counsel will be missed and words alone
Insured Vehicle (FIVS) project. This project is also expected to     cannot express our sincere gratitude for his contribution to the
deliver more accurate industry statistics to government around       industry.
key negotiation points.
                                                                     We also took leave of our deputy Chairman, Mike Truter, who
In General                                                           retired from the helm of Credit Guarantee. Mike has also put
                                                                     in many long hours in support of the SAIA. We are also deeply
While I have talked about specific issues, we are acutely aware      indebted to him for his support.
that our industry image and reputation still needs attention.
Under the guidance of our newly appointed Chairman,                  2014 will be one of our most challenging years, with so
Themba Gamedze, we expect to more fully engage                       many issues reaching critical junctures. We have a dedicated
government at top level on many of these issues. We need             and capable team at the SAIA and given the support of our
to tell government that insurance plays an essential role in the     members and our Board, I’m confident we will be able to rise
economy, protecting the assets and investments of our citizens       to these challenges. I’m delighted to present to you this Annual
and businesses. We are an ethical industry, with the interests       Review.
of our consumers at heart and with a long track record.

We have also embarked on a strategic review of the                   Barry Scott
effectiveness of SAIA’s engagement with government and an            SAIA Chief Executive

                                                                                                        NEW HORIZONS n SAIA l 9
1.1      Industry Results

     PRIMARY INSURERS: 31 DECEMBER 2013
 PRIMARY INSURERS: 31 DECEMBER 2013

                                                Claims Ratio:
                                                Claims Ratio:Primary
                                                              PrimaryInsurers
                                                                        Insurers                                                  Claims
                                                                                                                                  Claims incurred:
                                                                                                                                          incurred:
                                                                                                                                  2013: R40
                                                                                                                                  2013:     048m m
                                                                                                                                         R40,048
                                                                                                                                  2012: R37
                                                                                                                                  2012:     181m m
                                                                                                                                         R37,181
                                                                        2011       2012      2013                                 2011: R32
                                                                                                                                  2011:     970m m
                                                                                                                                         R32,970
                                                                                                      75%
                                                       66% 67%
                61% 62%                          61%
        57%                      52% 51%                                                                                55% 55%
                                                                                                            50%                   50%
                                    42%                             44% 42%                                       46%
                                                                                          38%                                                  38%
                                                                           35%                                                              30%
                                                                                                24%                                      23%
                                                                                      1.1
                                                                                      15%     Industry Results

             Property           Transportation         Motor          Accident &      Guarantee          Liability      Engineering Miscellaneous
                                                                                      PRIMARY INSURERS: 31 DECEMBER 2013
                                                                        Health

    Claims for the two largest classes of business, namely Property and Motor, are slightly up for the 2013 calendar year. Motor
 Claims   for the  two largest classes of business namely Property and Motor are slightly up for the 2013
PRIMARY  INSURERS:
    insurance
                                                                                 Claims     Ratio:   Primary
              claims remain high. In 2011, there were two insurers who recorded higher than usual claims in the liability business class.
 calendar year. Motor insurance claims remain high. In 2011, there were two insurers who recorded higher                                                                     Insu
 than usual claims in the liability business class.
                                                                                                                                                    2011   2012     2013
                                AssetAsset  allocations
                                     allocation           ofInsurers
                                                for Primary                                                                                                                   75%
                                      Primary Insurers                                                                            66% 67%
                                                                                                   61% 62%                  61%
                Net Premium SplitOther
                                   - 6%Primary
                                       assets
                                                                                             57%
                                                                                                          Asset
                                                                                                            52% allocation
                                                                                                               42%
                                                                                                                  51%      for44% 42%
                                                                                                                                                                  38%
                        Insurers %                                                                         Primary Insurers          35%
                                                                                                                                                                         24%
                                                                                                                               Other                              15%
                                     Debtors                                                     Outstandin
                                                                                                                               assets
                                                                                                       g Cash and equivalent instruments are the main
            Outstanding
             premiums 5% 3% 3%         8%                                Shares
                                                                                                                                6%
            3%  7%
                                                               Property   27%                            asset
                                                                                                  premiums      classes due to the nature of the short-term
                                                                                                             Debtors
     7%                                                                                               7%insurance industry’s risks. There is no observed
                                                                                                      Property 8% Transportation       Motor         Accident &   Guarantee   Lia
                                        33%                    Transportation
                                                                                Government & semi-       significant movement in asset Shares
                                                                                                                                         allocation dueHealth
                                                                                                                                                           to
       Fixed assets                                            Motor                 government                                           27%
           1%                                                                           11%              preparations for SAM.                      Governme
                          44%          Cash and deposits       Accident & Health
                                             38%                         Debentures and    ClaimsFixed
                                                                                                     for the two largest classes of business        nt &namely
                                                                                                                                                          semi- Property and Mot
                                                     2%        Guarantee mortgages                 assets                                           governme
                                                                                           calendar 1%year. Motor    Cashinsurance
                                                                                                                          and         claims remain high. In 2011, there wer
                                                                              2%                                                                         nt
                                                               Liability                   than usual claims in         the liability business
                                                                                                                     deposits            Debentureclass.11%
                                                                                                                       38%                  s and
       2013: R68,622 m                                         Engineering
       2012: R64,715 m                                                                                                                   mortgages
       2011: R60,283 m                                         Miscellaneous                                                                 2%
                                                                                                         Net Premium Split - Primary Insurers %
                                                                                                   Net Premium Split - Primary                                                  A
                                                                                                           Insurers %
                                                                                                                                                                   Outstandin
 Net premiums increased 6.04% in 2013     while the
                                    Net premiums   increased
                                                                                        Cash and5%
                                                                                                 equivalent
                                                                                                   3% 3%    instruments are the main                                   g
                                                                                                                                                                   premiums
 average consumer inflation for South Africa during
                                    6,04%  in 2013 while the                                 3%
                                                                                        assets
                                                                                                                        Property
                                                                                         7% class due to the nature of the short-term                                 7%
                                                                                                                                                                             Debt
 2013 was 5.77%. The increase in Net   premiums
                                  average consumer is inflation                                              33%        Transportation
                                                                                        insurance industry’s risks. We have not observed
                                                                                                                                                                               8%

 1.31% lower than in 2012.      for South Africa during 2013
                                                                                        any significant movement in assetMotor
                                                                                                                          allocation due
                                                         was 5,77%. The increase                    44%
                                                                                        to preparations for SAM.         Accident & Health                          Fixed
                                                       in Net premiums is 1,31%                                                2%       Guarantee                   assets
                                                              lower than in 2012.                                                                                    1%
                                                                                                                                        Liability
                                                                                            2013: R68 622m
                                                                                            2013: R68,622 m                             Engineering
                                                                                            2012: R64,715
                                                                                                  R64 715mm
                                                                                            2011: R60,283
                                                                                            2011: R60 283mm                             Miscellaneous

                                                                                      Net premiums increased 6.04% in 2013 while the                           Cash and equi
    10 l SAIA n NEW HORIZONS                                                          average consumer inflation for South Africa during                       assets class du
                                                                                      2013 was 5.77%. The increase in Net premiums is                          insurance indu
                                                                                      1.31% lower than in 2012.
INDUSTRY RESULTS

                                                   Assets, Liabilities and Capital Adequacy
                                                        Assets, Liabilites and CAR - R'bn                                                                            Profitability for 2013 - R'bn
                                                             Requirements - R’bn
                                                                RR120
                                                                 120        Assets, Liabilites and CAR - R'bn                                                                Profitability for
                                                                                                                                                                       R 12 Profitability  for2013
                                                                                                                                                                                               2013- R’bn
                                                                                                                                                                                                     - R'bn
                                                                 100 R 120
                                                                RR100                                                                                                  R 10
                                                                                                                                                                             R R12
                                                                                                                                                                               12
                                                                                                                                                                        R8
                                                                  80 R 100
                                                                 RR80                                                                                                        R R10
                                                                                                                                                                               10
                                                                                                                                                                        R6
                                                                                                                                                                              RR8
                                                                                                                                                                                8
                                   Axis Title

                                                                  60 R 80
                                                                 RR60                                                                                                   R4
                                                                                                                                                                              RR6
                                                                                                                                                                                6
                                                                                                                                                                        R2
                                                   Axis Title

                                                                  40 R 60
                                                                 RR40                                                                                                         RR4
                                                                                                                                                                                4
                                                                                                                                                                        R0
                                                                                                                                                                              RR2
                                                                                                                                                                                2
                                                                                                                                                                                Mar     Jun-    Sep-     Dec
                                             20 R 40
            Assets, Liabilites and CAR - R'mRR20                                                                                                                                -13      13      13      -13
                                                                                             Profitability for 2013 - R'm                                                     RR0
                                                                                                                                                                                0
         R 120,000                                                                                                                                           Underwriting                   Mar           Jun-         Sep-            Dec
                                                                            R 12,000                                                                                                R 1.3     R 3.7         R 5.9        R 6.5
                                                          R -R0 R 20        R 10,000                                                                         Profit/(Loss)                  -13            13           13             -13
         R 100,000
                                                                    Dec-11 R 8,000
                                                                               Dec-12      Jun-13                             Dec-13
                                                                                                                                                                     Underwriting
                                                                                                                                                             UW + Investment                R1.3
                                                                                                                                                                                            R 1.3         R3.7
                                                                                                                                                                                                          R 3.7        R5.9
                                                                                                                                                                                                                       R R5.9         R6.5
                                                                                                                                                                                                                                      R 6.5
          R 80,000                              Total Assets      R - RR90
                                                                        90      RR102
                                                                                   102
                                                                             R 6,000        RR106
                                                                                              106                                RR112
                                                                                                                                   112                                Profit/(Loss) R 2.4
                                                                                                                                                                  Income
                                                                                                                                                                                              R 6.0         R 9.4          11.4
                                                Total Liabilities          Dec-11
                                                                             R 4,000   Dec-12R57                          Jun-13R59 Dec-13
          R 60,000                                                    RR50
                                                                        50       RR54
                                                                             R 2,00054       R 57                                 R 59                               UW + Investment
                                                        Total Assets R9     R 90 RR18  R 102R21                            R 106R22 R 112                                                   R 2.4
                                                                                                                                                                                            R2.4          R 6.0
                                                                                                                                                                                                          R6.0         R 9.4
                                                                                                                                                                                                                       R9.4           RR11.4
                                                                                                                                                                                                                                        11.4
                                                CAR                    R9        R 018       R 21                                                                        Income
                                                                                                                            Sep- R 22
          R 40,000
                                                                                                        Mar   Jun-                   Dec
          R 20,000                                              Total Liabilities       R 50             R 54 13
                                                                                                        -13                R1357 -13 R 59
                                                                                     Underwriting
                                                                CAR                      R9
                                                                                     Profit/(Loss)        R 18 R 3,730
                                                                                                       R 1,301            RR 21
                                                                                                                           5,881   R 6,505   R 22
              R-
                      Dec-11      TheDec-12SAMJun-13interim Dec-13measures on Capital Adequacy introduced                                                   Profitability remains relatively healthy for the Primary
                         R 90,472 The      SAM        interim
                                                           R 111,686 measures         on Capital          Adequacy
                                                                              UW + Investment
       Total Assets                 R 101,547  R 105,649                                       R 2,363 R 6,045   R 9,407 R 11,421
                                                                                  Income
       Total Liabilities R 49,659 inR 54,391
                                       Board
                                  introduced      Notice  in    169
                                                               Board  of  2011
                                                                         Notice    had169  a significant
                                                                                              of   2011      impact
                                                                                                             had      a on the                              Insurers as a whole. However, natural disasters such as
                                                                                                                                                     Profitability remains relatively healthy for the
                                               R 56,957    R 59,257
       CAR               R 9,284
                                            The      SAM
                                    R 18,400 R 20,705 R 22,091
                                                                 interim     measures           on     Capital      Adequacy
                                  Capital
                                  significant impact on the Capital Adequacy to 2012,
                                               Adequacy            Requirements         (CAR)       from    2011                                     Primarythe hail storms
                                                                                                                                                              Insurers     as ainwhole.
                                                                                                                                                                                  GautengHowever
                                                                                                                                                                                           during thenatural
                                                                                                                                                                                                      fourth quarter of
The SAM interim measures          with     aintroduced
                                  Requirementsfurther
                                     on Capital    Adequacy
                                                                    in Board
                                                            noticeable
                                                                from    2011      Notice
                                                                            increase
                                                                                 to             169
                                                                                          in 2013.
                                                                                       2012       withof   a2011
                                                                                                         Primary
                                                                                                              further   had a
                                                                                                                       insurers,                           Profitability
                                                                                                                                                            2013   had   a  remains
                                                                                                                                                                           substantial relatively
                                                                                                                                                                                       impact on   healthy  forprofit.
                                                                                                                                                                                                 underwriting
                                                                                                                                                     disasters such as the hail storms in Gauteng during        the
introduced in Board Notice 169 ofsignificant  2011 had a           impact     on    the     Capital       Adequacy
                                                                                                               Primary  Insurers  as ahad
                                                                                                                                       whole.   However natural
                                  noticeable
                                  however,
significant impact on the Capital Adequacy
                                                         increase
                                                    remain               Profitability
                                                                        in
                                                                  well capitalised     remains
                                                                             2013. Primary        relatively
                                                                                         based oninsurers    healthy for the
                                                                                                         the current
                                                                                                         the fourth
                                                                         Primary Insurers as a whole. However natural
                                                                                                                        however
                                                                                                                     quarter of 2013        a substantial
Requirements from 2011 regulatory  to 2012 Requirements
                                  remain     withwell       capitalised
                                                   arequirements
                                                      further          from
                                                                           with
                                                                                 2011
                                                                               based
                                                                         disastersan
                                                                                   such
                                                                                            to
                                                                                          ason
                                                                                       excess
                                                                                                 2012
                                                                                             thethe
                                                                                                           with
                                                                                                        current       a further
                                                                                                               disasters  such as the
                                                                                                         impact on underwriting profit.
                                                                                                    in storms
                                                                                                  hail assets  inof   R30 338m.
                                                                                                                  Gauteng    during    hail storms  in Gauteng during
                                  noticeable
noticeable increase in 2013. Primary
                         regulatory                 increase
                                     insurers however
                                            requirements        in
                                                        the fourth  2013.
                                                                   quarter of Primary      insurers
                                                                              2013 had a substantial
                                                               with an excess in assets of           however   the  fourth quarter  of 2013   had a substantial
remain well capitalised based  on the current           impact on underwriting profit.
                         R30,
regulatory requirements with      remain
                               an 338
                                  excessm.    well
                                         in assets of capitalised based on the current                         impact on underwriting profit.
R30, 338 m.                       regulatory requirements with an excess in assets of
                                  R30,vs.
                              Gross       338Net m.Premium - Primary                                       Profit as a percentage of Net Premium - %
                                                Gross vs. Net Premium - Primary                                          Profit as- aPrimary percentage of Net Premium - %
                                                        Insurers
                                                         Insurers - -R'm
                                                                      R’m                               Gross vs. Net Premium
                                                                                                            GrossInsurers   - R'm
                                                                                                                        Operating profit/(loss) [incl. Investment Income] Underwriting profit/(loss)
                                                        Gross Premiums           Net Premiums
                                                                                                                   vs. Net Premium                - Primary
                                   R 80,951
                                   R80  951
                                                                    R 87,675
                                                                    R87  675
                                                                                      R96 178
                                                                                      R 96,178
                                                                                                                              Insurers
                                                                                                                   Gross Premiums   Net -Premiums
                                                                                                                                           R'm                                              28
                                                                                                                                                                                                    26
                                                                                                                                                                               23    22
                                                                                              R68
                                                                                               68,622
                                                                                                  622                                     20                     20                                       20             20
                                                 R60
                                                  60,283
                                                     283
                                                                          R 64,715
                                                                          R64  715
                                                                                                                              Gross Premiums              19   RNet Premiums
                                                                                                                                                                 96,178
                                                                                                                                                                                                                  17                     17 17
                                                                                                                                R 87,675                                16                                                        16
                                                                                                     R 80,951                                14
                                                                                                                                     10                                R 96,178
                                                                                                                                                                              11                                         11             10
                                                                                                                                                                                     9
                                                                                                                                             RR87,675                  R6 68,622            8       8     7       7               8            9
                                                                                                           RR 80,951                            64,715
                                                                                                              60,283
                                                                                                                                                              1
                                                                                                                                     -1    -1           0                R 68,622
                                           Dec 2011
                                           Dec-11                     Dec 2012
                                                                       Dec-12           Dec 2013
                                                                                         Dec-13
                                                                                                                              1998                  R 64,715
                                                                                                                                       1999 2000 -22001   2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
                                                                                                                         R 60,283

                          Net
Net retention of risks based    retention
                             on premium      of risks
                                          decreased     based
                                                    slightly overon
                                                                 the premium                 Underwriting
                                                                                         Underwriting
                                                                     last three years with ±3%. Net            profit
                                                                                                       profit for      for theInsurers
                                                                                                                  the Primary   Primary  Insurers
                                                                                                                                       over          over
                                                                                                                                            the last 10    the
                                                                                                                                                        years   last 10
                                                                                                                                                              remains    years consistent
                                                                                                                                                                      relatively remains however
retention for 2013 is at 71.35% of Gross Premiums.                                       the low interest environment does have a noticeable impact on operating profit.
                               decreased slightly over the last three years                                                relatively consistent, however the low interest environment does have a
                               with ±3%. Net retention for 2013 is at                                                      noticeable impact on operating profit.
                               71,35% of Gross Premiums.               Dec-11                                                            Dec-12                     Dec-13

                                                                                                                 Dec-11                             Dec-12                   Dec-13

                               Net retention of risks based on premium decreased slightly over the last three years with ±3%. Net
                               Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
                               retention for 2013 is at 71.35% of Gross Premiums.
                               Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.
                                                Net retention of risks based on premium decreased slightly over the last three years with ±3%. Net
                                                retention for 2013 is at 71.35% of Gross Premiums.

                                                                                                                                                                                                        NEW HORIZONS n SAIA l 11
REINSURERS: 31 DECEMBER 2013
REINSURERS: 31 DECEMBER 2013

                                                           Claims
                                                           ClaimsRatio:
                                                                  Ratio:Reinsurers
                                                                         Reinsurers                                                  Claims
                                                                                                                                     Claims incurred:
                                                                                                                                             incurred:
                                                                                                                                     2013:
                                                                                                                                      2013:R1R1,500
                                                                                                                                              500m m
                                                                                                                                      2012:R1R1,514
                                                                                                                                     2012:    514m m
                                                                               2011    2012       2013                                2011:R1R1,393
                                                                                                                                     2011:    393m m

                                                                                                                                              97%
                                                        74%                                                                                91%
           68% 67%                                   68% 67%                             68%                                                           66%
        58%        52%                                                    48% 48%                          58%                 47%
                                              34%                            38%                                            45%
                                           29%                                    29% 29%                             27%         40%

           Property          Transportation               Motor           Accident &      Guarantee             Liability   Engineering Miscellaneous
                                                                            Health
                                                                                         REINSURERS: 31 DECEMBER 2013
 REINSURERS                                                                                                      -86%

Guarantee     business
  Guarantee business      experienced
                       experienced        unusually
                                    unusually high claimshigh claims
                                                          during      during
                                                                 2013 while the 2013
                                                                                largestwhile
                                                                                       classes the  largest
                                                                                               - Property andclasses;  Property and
                                                                                                              Motor - remained
Motor
             Asset allocation of Reinsurers
  stable remained     stableyear.
         during the calendar  during the calendar year.                                                      Claims Ratio: Reinsurers
                                                     Asset allocations of Reinsurers                                                                 2011      2012      2013

                                                                                                      Asset allocation of Reinsurers
             Net Premium
                  Debtors Split  - Reinsurers %
                             Other assets                                                                                            74%
                           5%
                                                    10%
                                                                                                     68% 67%                      68% 67%                                68%
                                                                       Shares                     58%        52%            34%                 48%      48%                      58%
                                                                        15%                        Debtors               Other                         38%
                                                                                                                          29%                                    29% 29%
                                                                                                         5% Asset allocations
                                                                                                                         assets of the short-term
                                                                                                                                          Shares      Reinsurers
     3%
                       15% 3%                                                                  Outstandi are relatively   10%evenly spread. 15%An analysis of
                    Outstanding premiums
                   5% 5%                                           Property
                                                                                                      Property asset
                                                                                                     ng           Transportation
                                                                                                                     allocation of the Motor
                                                                                                                                        last 3 yearsAccident
                                                                                                                                                    indicates&a Guarantee           Liab
         1%                                                        Transportation Government & semi-
                                                                                     governmentpremiums                                               Health
                                                                                         32%
                                                                                                               stable investment   strategy  with no noticeable
                                                  52%              Motor                           15%         movements.
                  28%      Cash and deposits                                                                                                                                         -86
   Fixed assets                  16%                               Accident & Health
       1%
                           3%                                      Guarantee
                                                                                         Guarantee
                                                                                            Fixed
                                                                                                   business experienced unusually high claims during 2013 whil
                                                          Debentures and
                                                                   Liability
                                                            mortgages                    Motor  remained stable during the calendar year.
                                                               6%
                                                                                            assets
                                                                   Engineering                   1%                                     Governme
   2013: R2,523 m                                                  Miscellaneous                                    Debentur            nt & semi-
                                                                                              Cash and
   2012: R2,451 m                                                                                     Net Premium
                                                                                                                      es- and
                                                                                                                  Split   Reinsurers %  governme                               Asset al
   2011: R2,291 m
                                                                                                    Net Premium Split
                                                                                              deposits                    - Reinsurers % nt
                                                                                                                   mortgages
                                                                                                16%
                                                                                                                        6%                 32%                            Debtors
                                                                                                                                                                            5%
                                                                                                3%            3%
                                                                                                        5% 5%                            Property                     Outstandi
Net premiums increased with R72m in 2013                                                   Asset1%allocations of the short-termTransportation
                                                                                                                                  Reinsurers are                          ng
                       Net premiums increased with R72m
noticeably lower than the R160m increase in 2012                                           relatively evenly spread. An analysis     of asset                         premiums
                         in 2013 noticeably lower than the                                                             52%      Motor
from 2011. Property and Motor    made up 80% of the                                        allocation  of the last 3 years indicates  a stable
                                                                                                                                                                         15%
                       R160m increase in 2012 from 2011.                                           28%
net risk premium of South  African Reinsurers.                                             investment strategy     with no
                                                                                                                                Accident & Health
                                                                                                                           noticeable
                                             Property and Motor made up 80%                               3%                    Guarantee
                                               of the net risk premium of South            movements.                                                                 Fixed
                                                                                                                                         Liability
                                                               African Reinsurers.                                                                                    assets
                                                                                                                                         Engineering                   1%
                                                                                              2013:
                                                                                               2013:R2 523m
                                                                                                     R2,523 m                            Miscellaneous                Cash and
                                                                                               2012:R2
                                                                                              2012:  R2,451
                                                                                                       451m m                                                         deposits
                                                                                               2011:R2
                                                                                                     R2,291 m
                                                                                              2011:    291m                                                             16%

                                                                                         Net premiums increased with R72m in 2013                                 Asset allocation
  12 l SAIA n NEW HORIZONS                                                               noticeably lower than the R160m increase in 2012                         relatively evenly
                                                                                         from 2011. Property and Motor made up 80% of the                         allocation of the
                                                                                         net risk premium of South African Reinsurers.
INDUSTRY RESULTS

                                      Assets, Liabilities and Capital Adequacy                                                          Profitability of Reinsurers - R’m
                                       Assets,
                                   Assets,     Liabilites
                                           Liabilites  and
                                              Requirementsand CAR- -R'm
                                                            CAR
                                                            - R’bn   R'm
                                                                       bn                                                      Profitability of Reinsurers
                                                                                                                                 Profitability             - R'm - R'm
                                                                                                                                                 of Reinsurers
                                R 10,000
                                      R10                                                                                          R500
                          R 10,000R 9,000
                                                                                                                                      R500
                                       R9                                                                                          R400
                            R 9,000
                                  R 8,000
                                       R8                                                                                             R400
                                                                                                                                   R300
                            R 8,000
                                  R 7,000
                                       R7                                                                                             R300
                                                                                                                                   R200
                            R 7,000
                                  R 6,000
                                       R6                                                                                             R200
                                                                                                                                   R100
                            R 6,000
                                  R 5,000
                                       R5
                                                                                                                                      R100
                                                                                                                                      R0
      Assets, Liabilites andRCAR -RR'm
                              5,000 4,000
                                       R4                               Profitability of Reinsurers - R'm
                                  R 3,000
                                       R3                                                                                         (R100) R0
    R 10,000                R 4,000                                    R500
                                  R 2,000
                                       R2                                                                                         (R200)
                                                                                                                                     (R100)
     R 9,000                R 3,000                                    R400
                                  R 1,000                                                                                         (R300)
     R 8,000
     R 7,000
                            R 2,000 RR1 -
                                       R0
                                                                       R300                                                          (R200)              31-           30-          30-          30-
     R 6,000                R 1,000                    Dec-      Dec- R200              Dec-                                            (R300) Mar-                   Jun-         Sep-          Dec-
                                                                          Jun-13
                                                                       R100                                                                              13         31- 13       30-13          30-
                                                                                                                                                                                                  13            30-
     R 5,000                    R-                      11        12                     13
      R 4,000
                                  Total Assets
                                                  Dec-
                                                     R R8.0
                                                             Dec-9,299 R0
                                                       8,043 RR9.3          R9.1       Dec-
                                                                                      R R9.4                               Underwriting                    Mar-      Jun-                      Sep-             Dec-
      R 3,000                                                             R 9,140
                                                                        Jun-13
                                                                      (R100)            9,392                                                           R50 13(R256) 13(R16)                    R100
                                                                                                                                                                                                13               13
      R 2,000                                      11         12      (R200)R7.3        13                                 Profit/(Loss)
                                  Total Liabilities R R7.3
                                                       7,289 RR8.0
                                                                 8,039 R 7,340        R R7.4
                                                                                        7,417
      R 1,000                                                         (R300)                                               UWUnderwriting
                                                                                                                              + Investment
                           Total Assets         R 8,043     R 9,299    R 9,140   31- R 9,392
                                                                                         30-  30-             30-                                       R109 R50
                                                                                                                                                               (R111)(R256)
                                                                                                                                                                        R186                  (R16)
                                                                                                                                                                                                R369            R100
          R-
                  Dec-      Dec-
                                  CAR                 RR0.3
                                                   Dec-
                                                        347     RR0.9
                                                                  903      RR0.8
                                                                             801       RR0.9
                                                                                         870
                                                                                       Mar-     Jun- Sep-     Dec-             Income
                                                                                                                             Profit/(Loss)
                   11      Total
                             12    Liabilities
                                      Jun-13        R 7,289
                                                    13            R 8,039     R   7,340 13 R   7,417
                                                                                                 13   13       13
                                                                                                                               UW + Investment
                                                                       Underwriting                                                               R109 (R111) R186             R369
  Total Assets   R 8,043    CAR
                            The   SAMR 9,140
                             R 9,299     interimR 9,392
                                                  measures
                                                    R 347 onR Capital
                                                                   903         Adequacy
                                                                                 R 801 R50introduced
                                                                       Profit/(Loss)            R (R256)
                                                                                                   870 (R16) R100                Income
  Total Liabilities R 7,289 The    SAM
                             R 8,039      interim
                                       R 7,340       measures onUWCapital
                                                R 7,417                               Adequacy                   Underwriting     profit   is under  severe   pressure.   An
                            in Board Notice 169 of 2011 had a significant  + Investment impact on
                                                                                          R109 (R111) R186       R369
  CAR                R 347 introduced
                              R 903     R 801in Board
                                                 R 870 Notice 169 of            2011 had
                                                                            Income             a                 analysis   of underwriting profit over the last 3
                            the   Capital
                            significant    Adequacy
                                             impact   onRequirements
                                                          the  Capital    from      2011
                                                                             Adequacy      to  2012.                 Underwriting
                                                                                                                 years   indicates profit
                                                                                                                                      flatis profit
                                                                                                                                    aprofit  under severe  pressure. An analysis of
                                                                                                                                                    environment.
                    The SAM       interim
                            Reinsurers         measures
                                           remain   well 2011 on
                                                         capitalisedCapital         Adequacy
                                                                       basedReinsurers
                                                                                  on the   current                Underwriting                 is  under   severe    pressure.      An
SAM interim measures Requirements
                             on Capital Adequacy from          to 2012.
                                                             Underwriting        profit is under   severe pressure.underwriting
                                                                                                 remain               An           profit over the last 3 years indicates a flat profit
                    introduced
 duced in Board Notice well regulatoryin  Board     Notice
                                     2011requirements
                                            had a basedwith
                            169 ofcapitalised                 169     of
                                                                an excess
                                                             analysis      2011        had
                                                                                in assets
                                                                        of underwriting      a
                                                                                            ofprofit              analysis    of
                                                                                                      over the last 3environment.
                                                                                                R1 105m,                          underwriting       profit   over   the   last   3
                                                           on   the    current       regulatory
ficant impact on    significant      impact on
                      the Capital Adequacy
                            requirements
                            when compared        withthe
                                                  with  theCapital
                                                        an excess
                                                            net  risk inAdequacy
                                                             years indicates
                                                                          assets
                                                                       retained.   a flat profit environment. years indicates a flat profit environment.
                                                                                      of R1, 105 m
 irements from 2011 to 2012. Reinsurers remain
              Requirements
                       when
capitalised based on the
                                    from 2011 to 2012. Reinsurers remain
                               compared
                          current regulatory with the net risk retained.
irements with well   capitalised
               an excess              based
                         in assets of R1, 105 mon the current regulatory
              requirements
n compared with                    with an excess in assets of R1, 105 m
                 the net risk retained.

                 when compared with the net risk retained.
                                                                                      Gross vs. Net Premium -
                                        Grossvs.
                                              vs.Net
                                                  NetPremium
                                                     Premium --
                                        Gross
                                            Reinsurers - R’m
                                                                                         ReinsurersProfit
                                                                                                     - R'mas a percentage of Net Premium - Reinsurers - %
                                           Reinsurers - R'm                                                  Operating profit/(loss) [incl. Investment Income]                     Underwriting profit/(loss)
                                                                                    Gross Premiums            Net premiums
                                                                      premiums Gross vs. Net                 PremiumR 7,712-
                                               Premiums
                                         Gross Premiums           Net Premiums
                                                                  Net
                                                   R7 574
                                                   R 7,574              R 7,712
                                                                        R7 712R 7,138         R 7,574         18
                                   R
                                                                                         Reinsurers - R'm
                                   R77,138
                                      138                                                               16                                                                                          16          16
                                                                                                                                       15                                               15                                  15
                                                                                                                                                   14
                                                                                                13                                                             13
                                                                                                                   12                                                       12

                                                                             R
                                                                               Gross Premiums
                                                                             R22,523
                                                                                                      Net premiums
                                                                                                           9                                                                            9
                                                                                                                                                                                                    10
                                        RR22,291
                                             291          RR22,451
                                                               451              523                               8
                                                                                R 2,291  R    7 R 2,451
                                                                                           7,574             R 7,712
                                                                                                                R 2,523 6                                      6
                                                                         R 7,138                                                                                            4                                               4

                                     Dec 2011          Dec 2012          Dec 2013                                                                                                                               1
                                     Dec-11            Dec-12            Dec-13
                                                                                                   2003     2004        2005    2006        2007        2008         2009        2010        2011        2012        2013
                                                                      Dec-11                Dec-12                   Dec-13
                         Net retention for 2013 is at 32,72% of Gross  R 2,291      Underwriting
                                                                                 Underwriting    R  2,451
                                                                                                profit is profit
                                                                                                          under   is under
                                                                                                                 severe      Rsevere
                                                                                                                        pressure2,523pressure.
                                                                                                                                 however the returnHowever,    thearereturn
                                                                                                                                                    on investments           on the
                                                                                                                                                                       supporting
                                                                                 profitability of reinsurers.
 etention for 2013 is at Premiums.  OnlyPremiums.
                         32.72% of Gross  9% of theOnly
                                                     total9%available               investmentsBusiness
                                                             of the total available Reinsurance        is supporting the profitability of reinsurers.
ains in South Africa.
                         Reinsurance Business remains in South Africa.
                           Net retention for 2013 is at 32.72% of Gross Premiums. Only 9% of the total available Reinsurance Business
                           remains in South Africa.          Dec-11           Dec-12           Dec-13

                           Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
                 Net retention
                      Note 2: All for
                                  data2013  is at
                                      obtained    32.72%
                                               from         of Gross
                                                    the Financial       Premiums.
                                                                  Services Board (FSB) Only  9% of the
                                                                                       and reproduced   total
                                                                                                      with      availableofReinsurance
                                                                                                           the permission   the FSB.   Business
                 remains in South Africa.

                                                                                                                                                                            NEW HORIZONS n SAIA l 13
CELL CAPTIVE: 31 DECEMBER 2013
    CELL CAPTIVE: 31 DECEMBER 2013
CELL CAPTIVE: 31 DECEMBER 2013

                                   Claims
                              Claims      Ratio:Cell
                                        Ratio:    CellCaptive
                                                       Captive Insurers
                                                                Insurers
                            Claims
       CELL CAPTIVE: 31 DECEMBER 2013 Ratio: Cell Captive Insurers
                                             2011  2012  2013
                                                         2011       2012       2013
                                                                               174%
                                   Claims Ratio: Cell Captive
                                                        174%  Insurers                                       126%
                                                                                  98%
                                                                           126%           89%
          73% 75% 62%                    63%2011  2012   2013
                     55%        66% 64%                       43%               98% 54%       40%
                        37%                39% 32% 29%174%     89%   39%                29%
      73% 75% 62%           25%  64%  63%               23%             22%                24%
                  55%        66%                            43%                   54% 29% 40%
                     37%                39% 32% 29%                39% 126%
                         25%                         23%             22% 98%             24%
             Property Transportation    Motor     Accident &          89%
                                                                Guarantee      Liability    Engineering Miscellaneous
            73% 75% 62% 55%        66% 64%
                                            63%
                                                                  43%                                  40%
                                                    Health                39%              54%   29%
                           37%
         Property Transportation              39% 32% 29%
                               25% Motor       Accident & 23%Guarantee     Liability
                                                                             22%         Engineering24%
                                                                                                      Miscellaneous
       Cell Captive Insurers’ motor business had a more Health
                                                        favourable claims experience in 2013 than the Typical Insurers while the claims
    Cellratio
          Captive     Insurers’
              for Property
                  Accident and   motor
                               Health  hasbusiness
                            Transportation    Motor had
                                           decreased        a from
                                                     slightly  more
                                                          Accident   favourable
                                                                       Guarantee claims
                                                                   2012.
                                                                   &                       experience
                                                                                    Liability          in 2013
                                                                                               Engineering       than the Typical
                                                                                                           Miscellaneous
    Insurers while the claims ratio for AccidentHealth         and Health has decreased slightly from 2012.
Cell Captive Insurers’ motor business had a more favourable claims experience in 2013 than the Typical
Insurers while the claims ratio for Accident and Health has decreased slightly from 2012.
       Cell Captive Insurers’ motor business had a more favourable claims experience in 2013 than the Typical
       Insurers while the claims ratio for Accident and Health has decreased slightly from 2012.

              Net Premium Split - Cell Captive                                              Profitability of Cell Captives
                                                                                                     Insurers    - R'm
            Net Premium Insurers  % Captive
                        Split - Cell                                                           Profitability
                                                                                        Profitability    of of Cell
                                                                                                             Cell   Captive
                                                                                                                   Captives
                                                                                                      Insurers - R’m
                  Net Premium
                    Net          Split
                          Insurers
                        Premium       --Cell
                                 Split%  CellCaptive
                                              Captive                                       R 2,000
                                                                                                  Insurers
                                                                                      Profitability          - R'm
                                                                                                    of Cell Captives
                              Insurers %                                                      RInsurers
                                                                                                1,800 - R'm
                             Insurers %            Property                                   R 1,600
                                                                                          R 2,000
                                                                                             R2 000
                                                                                              R 1,400
                                                                                          R 1,800
                                                                                             R1
                                                                                       R 2,000  800
                 5%                                                                           R 1,200
         10% 1%
                                                      Transportation
                                                  Property                                R 1,600
                                                                                       R 1,800
                                                                                             R1 600
     0%
                                                   Property                            R 1,600R 1,000
                                                                                          R 1,400
                                                                                             R1 400
              5% 5%                                   Motor                               R  R1 R
                                                                                       R 1,400
                                                                                             1,200 800
      10% 1%                     30%              Transportation                                200
           10% 1%
                                                   Transportation                      R 1,200
                                                                                             R1 R  600
   0% 0.4%                                                                                R  1,000
                                                                                                000
                                                                                       R 1,000 R 400
       0%23%                                         Accident & Health
                                                  Motor                                     R  800
                                                                                               R800
                                                                                         R 800 R 200
                            30%30%                 Motor
                                                                                            R 600
                                                                                         R 600 R600
        23% 23%           25%                         Guarantee
                                                  Accident
                                                   Accident & Health
                                                              Health                        R 400
                                                                                         R 400 R400R-
                                                                                                          Mar-          Jun-       Sep-     Dec-
                                            6%                                              R 200
                                                                                         R 200 R200        13            13         13       13
                      25%25%                         Liability
                                                   Guarantee
                                                  Guarantee                                R - R -R0
                                                                                                    Mar- Jun-
                                                                                         Underwriting Mar-         Sep-
                                                                                                                 Jun-     Dec-
                                                                                                                         Sep-    Dec-
                                        6%6%       Liability                             Profit/(Loss)
                                                                                                      13
                                                                                                         13
                                                                                                           R13186 13
                                                                                                                  13
                                                                                                                    R 584 13R 699 R 1,122
                                                                                                                          13      13
                                                      Engineering
                                                  Liability                       Underwriting
                                                                                    Underwriting    R 186
                                                                                          UW + Investment    R 584    R 699 R 1,122
                                                   Engineering                    Profit/(Loss)           RR186
                                                                                                            186
                                                                                                              R 324 RR584
                                                                                                                      584
                                                                                                                        R 865 RR699
                                                                                                                                699    RR11,122
                                                                                                                                 R 1,165   R122
                                                                                                                                             1,759
                                                      Miscellaneous
                                                  Engineering                        Profit/(Loss)
                                                                                              Income
                                                                                  UW + Investment
                                                   Miscellaneous                                   R 324     R 865   R 1,165 R 1,759
                                                                                    UW   + Investment
                                                                                      Income
                                                  Miscellaneous                                            RR324
                                                                                                             324     RR865
                                                                                                                       865     RR11,165
                                                                                                                                    165 RR1 759
                                                                                                                                          1,759
                                                                                          Income
                                                                                Similar to the Typical Insurers profitability
    Accident
        Accidentand  Healthandand
                 and Health         Liability
                                 Liability        is significantly
                                           are significantly more more     Similar
                                                                              Similarto
                                                                                      tothe
                                                                                 remains  the Typical
                                                                                               Typical   Insurers
                                                                                                       Insurers,
                                                                                               relatively          profitability
                                                                                                                 profitability
                                                                                                             healthy           remains
                                                                                                                         for the   Cellrelatively
                                                                                                                                         Captive
       Accident and Health and Liability is significantly more             remains     relatively   healthy    for the  Cell   Captiveincome
    relevant    under
        relevant under Cell  Captives      Insurers.                         Similar     to   the  Typical    Insurers     profitability
       relevant
Accident          underCell
            and Health  CellCaptives
                          andCaptivesInsurers.
                               Liability  Insurers.
                                             is significantly more
                                                                              healthy
                                                                           Insurers.
                                                                                       for  the Cell
                                                                                        Investment
                                                                                                     Captive
                                                                                                        income
                                                                                                               Insurers. Investment
                                                                                 Insurers. Investment income contributed a
                                                                                                                  contributed     a Captive
                                                                             remains
                                                                              contributed
                                                                                 noteworthyrelatively
                                                                                             a noteworthy healthy
                                                                                                             portion for
                                                                                                                     to thethe   Cell
                                                                                                                              income  of Cell
relevant under Cell Captives Insurers.                                     noteworthy        portionportion     to the
                                                                                                       to the income      income
                                                                                                                         of  Cell of Cell
                                                                             Insurers.
                                                                              Captives.
                                                                                 Captives.  Investment       income      contributed      a
                                                                           Captives.
                                                                            noteworthy portion to the income of Cell
                                                                            Captives.

       14 l SAIA n NEW HORIZONS
INDUSTRY RESULTS

CAPTIVE INSURERS: 31 DECEMBER 2013
            CAPTIVE INSURERS: 31 DECEMBER 2013

                                         Claims Ratio:
                                                 Claims Captive
                                              Claims
                                                                  Insurers
                                                        Ratio: Captive
                                                     Ratio:            Insurers
                                                            Captive Insurers
              CAPTIVE INSURERS: 31 DECEMBER 2013
                                                              2011        2012        2013
                                                                         2011       2012        2013
                          126%           126%
                                    95%Claims     Ratio:
                                                     92% Captive     Insurers
                 91%            91%      76%95%
                                              92%76%79%   79%
                                                                    88% 88%
                                         73%
                                        73%      57% 57%                                                                                         63%
                                                                                                                                                   63%
                                                     2011  2012  2013                                                                         40%
                                                                                                                                                40%
      34% 35%       34% 35%
                      23%      23%                              13% 13%34% 34%                                             29%29%
                            11% 126%11%                                                                                        4% 4%
                                                             0% 0%
                                91%                    95% 76% 92%                               88%
                      Property Transportation                  79%&
        Property     Transportation   Motor73% Motor
                                                 Accident Accident   GuaranteeLiability
                                                          &57% Guarantee             Liability Engineering
                                                                                                   EngineeringMiscellaneous
                                                                                                                Miscellaneous
                                                                                                                 63%
                                                            Health   -8%                                      40%
                     34% 35%                       Health       -8%      13%     34%      -43% 29%-25%
                                  23%
                                      11%
                                                                     0%
                                                                                   -43% -25% 4%                  -68%
                                                                                                              -68%
                        Property    Transportation    Motor        Accident &       Guarantee       Liability      Engineering Miscellaneous
               Captive Insurers experience a very high claims year Health
                                                                   in their Property business class and also-25%
                                                                                                             normalisation of other classes.
            Captive Insurer experience in very high claims year in-8%           their Property business
                                                                                                     -43%      class and also normalisation of
Captive Insurer
            otherexperience
                  classes.  in very high claims year in their Property business class and also normalisation of
                                                                                            -68%

other classes.
              Captive Insurer experience in very high claims year in their Property business class and also normalisation of
              other classes.
                  Net Premium Split - Captive                                                              Profitability of Captives
                          Insurers %                                                                              Insurers
                                                                                                           Profitability      - R'm
                                                                                                                         of Captive
           Net Premium Split - Captive                     Property
                                                                                                       Profitability     of Captives
                                                                                                                   Insurers - R’m

                           Insurers %
                          NetPremium
                          Net  Premium
                                     Split - Split - Captive
                                             Captive Insurers %                                                Insurers -
                                                                                                             R 400          R'm
                                                                                                         Profitability of Captives
                                                           Transportation                                   R 300
                                                      Property
                        0%         2%     Insurers %                                                     400 Insurers - R'm
                                                                                                       R R400
                                                                 Motor
                                                              Property                                       R 200
                                                      Transportation                                   RRR300
                                                                                                          400
                                                                                                         300
         0%         2% 41%                 32%                   Accident & Health
                                                               Transportation                               R 100
                       0.3%
                         0%         2%                Motor                                            RRR200
                                                                                                          300
                                                                                                         200  R-
                                                                Guarantee
                                                               Motor                                    R 200
                              32%         16%         Accident & Health                                R R100
                                                                                                         100
                                                                                                           R -100
          41%                              32%        2%       Accident  & Health
                                                                 Liability                              R 100
                         41%
                                                      Guarantee
                                                                                                         RR -R0
                                                                                                             -R -200
                                                             Guarantee
                                                                 Engineering
                           16%
                             2% 5% 16%                                                              R-100R -300
                                                                                                   R(R100)
                                                                                                      -100
                                    2%               2%
                                                      Liability Liability
                                                                   Miscellaneous
                                                                                                                           Mar-      Jun-     Sep-    Dec-
                                                                                                    R-200
                                                                                                      -200
                                                                                                   R(R200)                  13        13       13      13
                                                              Engineering
                               2% 5%                  Engineering                                        Underwriting
                                                                                                    R -300
                2% 5%                                                                              R(R300)
                                                                                                     -300        Mar-
                                                                                                       Profit/(Loss)
                                                                                                                           R -264
                                                                                                                              Jun-   RSep-
                                                                                                                                       57     RDec-
                                                                                                                                                147   R 240
                                                               Miscellaneous                                       Mar-
                                                                                                                   13       13Jun- 13 Sep-13 Dec-
                                                      Miscellaneous                                         UW + 13            13      13     13
                                                                                                  Underwriting
                                                                                                        Investment
                                                                                                                 R -264 R -233
                                                                                                                           R 57 RR109
                                                                                                                                   147 RR 228
                                                                                                                                          240 R 348
            As expected
                As expectedfrom    CaptiveInsurers,
                              from Captive   Insurers,   Liability
                                                    Liability          is theclass
                                                              is the largest   largest             Profit/(Loss)
                                                                                                 Underwriting
                                                                                                           Income (R264)
                                                                                                                  R -264 RR57   57   RR147
                                                                                                                                       147 RR240
                                                                                                                                              240
            classof of business   atof41%                                                        Profit/(Loss)
                                                                                                     UW +
                    business at 41%    Net of Net Premium.
                                           Premium.                                                Investment     R -233     R 109    R 228   R 348
              As expected from Captive Insurers, Liability is the largest                           UW   +
                                                                                                     Income
              class of business at 41% of Net Premium.                                      An Investment    (R233)
                                                                                                analysis of assets    RR109
                                                                                                             R -233 has 109   RR228   RR348
                                                                                                                                228 a movement
                                                                                                                         indicated      348
As expected from Captive Insurers, Liability is the largest                                       Income
                                                                                            away from equity over the last year that has had
class of business at 41% of Net Premium.                                                 An analysis of assets has indicated a movement
                                                                                            a slightly impact on the profitability of Captives.
                                                                                       An analysis
                                                                                       away    from  of equity
                                                                                                        assets has indicated
                                                                                                                over          a movement
                                                                                                                       the last  year thataway has from
                                                                                                                                                   had
                                                                                     Anequity
                                                                                       aanalysis
                                                                                         slightly      oflast
                                                                                              over impact
                                                                                                     the   assets
                                                                                                               on the
                                                                                                              year    has
                                                                                                                    that hasindicated
                                                                                                                         profitability      aCaptives.
                                                                                                                                               movement
                                                                                                                             had a slightofimpact on the
                                                                                     away   fromofequity
                                                                                       profitability    Captives.over the last year that has had
                                                                                     a slightly impact on the profitability of Captives.
                 Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
                 Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.

                                                                                                                               NEW HORIZONS n SAIA l 15
TYPICAL INSURERS: 31 DECEMBER 2013
  TYPICAL INSURERS: 31 DECEMBER 2013
TYPICAL INSURERS: 31 DECEMBER 2013

                                       Claims
                                  Claims      Ratio:Typical
                                            Ratio:    Typical Insurers
                                                               Insurers
                                Claims Ratio:
        TYPICAL INSURERS: 31 DECEMBER 2013    2011
                                                   Typical
                                                     2012
                                                            Insurers
                                                           2013

                 67%                    68%2011      2012    2013
             65%           63%     66%                                      67%                   63%
         59%   67%             60%   68%                             57%
           65%       52%63%    Claims Ratio: Typical Insurers
                                66%                                      67%
                                                                         52%
                                                                                 48%
                                                                                     54%
                                                                                        49%    63%
                                                                                               49%
       59%              44% 60%                             39% 39%
                                                                  57%
                                                                      52%         54%
                   52%                     38% 39%        37%                 48%     49%   49%
                      44%                    2011   36% 39%
                                                    2012   201339%
                                         38% 39%                                            28%
                   67%                 68%        36% 37%
                     65%                        66%                                        67%                            28%
                                    63%                                                                                   63%
               59%                        60%                                      57%                 54%
                              52%                                                        52%              49%         49%
                                                                                                   48%
                                 44%                                      39% 39%
                                                          38% 39%       37%
              Property     Transportation       Motor             36%
                                                              Accident &    Guarantee          Liability      Engineering Miscellaneous
                                                                                                                  28%
          Property     Transportation       Motor               Health
                                                           Accident &    Guarantee        Liability        Engineering Miscellaneous
                                                          Health
      Typical insurers experienced an increase in claims for most of the business classes during the 2013 year, especially Liability and
  Typical   insurer
      Miscellaneous   experienced
                     were
                 Property  much  higheran
                           Transportation
                                           increase
                                         than          inAccident
                                                          claims
                                              normal, albeit
                                             Motor
                                                                   forGuarantee
                                                                        mostare
                                                             those&businesses  of small
                                                                                  theLiability
                                                                                        business    classes
                                                                                        in comparison          during
                                                                                                        with the
                                                                                                  Engineering
                                                                                                                         the 2013
                                                                                                                 total insurance
                                                                                                               Miscellaneous
                                                                                                                                      year
                                                                                                                                 business
  especially
Typical insurer
      written.  Liability and
                   experienced  Miscellaneous
                                   an   increase    were
                                                   in claimsmuchfor
                                                           Health   higher
                                                                    most    than
                                                                           of the   normal
                                                                                    business   albeit  those
                                                                                                 classes       businesses
                                                                                                           during   the   2013 are
                                                                                                                                 yearsmall in
  comparison
especially      to the
           Liability andtotal insurance business
                          Miscellaneous   were much  written.
                                                         higher than normal albeit those businesses are small in
comparison   to the  total insurance  business   written.
      Typical insurer experienced an increase in claims for most of the business classes during the 2013 year
        especially Liability and Miscellaneous were much higher than normal albeit those businesses are small in
        comparison to the total insurance business written.
              Net Premium Split - Typical                                              Profitability    of Typical Insurers -
                                                                                              Profitability of Typical
             Net Premium      Split -%Typical
                         Insurers                                                   Profitability          R'm
                                                                                                     of Typical
                                                                                                  Insurers  - R’bn Insurers -

                      Insurers     % - Typical
                  Net Premium Split - Typical                                             R 5,000     R'm bnInsurers -
                 Net Premium     Split
                          Insurers %
                                                                                  Profitability of Typical
                                                                                            R 4,500
                                Insurers %                                              R 5,000 R5 R'm
                                                                                            R 4,000
            3%                                            Property                      R 4,500
                                                                                            R 3,500
                                                                                     R 5,000
                                                                                        R 4,000
         3%1% 4% 1%                                   Property                          R  3,500
                                                                                                R4
                                                                                     R 4,500R 3,000
        2%                                               Transportation              R 4,000R 2,500
         1% 3% 4% 1%                                    Property                        R 3,000
                                                                                     R 3,500    R3
                                                                                            R 2,000
      2%             1% 33%                           Transportation
                                                         Motor                          R 2,500
               1% 4%                                                                 R 3,000R 1,500
           2%
                     33%
                                                        Transportation
                                                      Motor
                                                        Accident & Health
                                                                                        R 2,000
                                                                                     R 2,500    R2
                                                                                            R 1,000
                         33%                                                         R 2,000
                                                                                        R 1,500
                                                        Motor
                                                                                     R 1,500  R 500
              54%                                     Accident & Health
                                                         Guarantee                      R 1,000 R1
                                                                                                R-
                                                        Accident & Health            R 1,000
                                                                                           R 500
                                                                                       R 500           Mar-              Jun-     Sep-      Dec-
           54% 54%
                                                                                         R - R -R0
                                            2%        Guarantee
                                                         Liability
                                                       Guarantee                                        13                13       13         13
                                                                                                    Mar-   Mar-
                                                                                                              Jun-  Jun-
                                                                                                                      Sep-    Sep-
                                                                                                                              Dec-      Dec-
                                          2%2%        Liability
                                                           Engineering
                                                        Liability                        Underwriting13 1313
                                                                                                               R 527 1313
                                                                                                                       R 1,365 13
                                                                                                                               13R 2,405 13R 1,806
                                                                                         Profit/(Loss)
                                                      Engineering
                                                       Engineering
                                                         Miscellaneous             Underwriting R 527 R 1,365 R 2,405 R 1,806
                                                                                 Underwriting
                                                                                                           R0.5     R1.4      R2.4     R1.8
                                                                                         UW + InvestmentR 527 R 1,365 R 2,405 R 1,806
                                                                                 Profit/(Loss)
                                                                                    Profit/(Loss)
                                                       Miscellaneous
                                                      Miscellaneous                                          R 1,102 R 2,648 R 4,278 R 4,521
                                                                                               Income
                                                                                 UW + Investment
                                                                                   UW + Investment R 1,102 R1.1
                                                                                                            R 2,648 R 4,278 RR4.3
                                                                                                                              4,521
                                                                                      Income             R 1,102 RR2.6
                                                                                                                     2,648 R 4,278 RR4.54,521
                                                                                          Income

     Motor, Property and Guarantee equates to more than 90% of         Profitability remains remains
                                                                           Profitability      relatively healthy  for thehealthy
                                                                                                           relatively     Typical Insurers
                                                                                                                                    for the
  Motor,
     the   Property
      Motor,
         total Property
               Net     and
                         andGuarantee
                   Premium   ofGuarantee     equatestoto
                                            equates
                                Typical Insurers.        more
                                                       more      than Profitability
                                                              than
                                                                                      remains relatively     healthy for    the
                                                                       as a whole. However, natural disasters such as the hail storms
                                                                           Typical
                                                                       Profitability
                                                                      Typical Insurers Insurers
                                                                                         remains   asrelatively
                                                                                          as a whole.  a However
                                                                                                           whole. However
                                                                                                                     healthy
                                                                                                                      natural for  natural
                                                                                                                                     the
  90%90%
Motor, of the
       Property total
           of the     Net
                    and
                   total   Premium
                         Guarantee
                         Net              ofTypical
                             Premiumequates
                                          of  Typical
                                                   to Insurers.
                                                       more than
                                                    Insurers.          in Gauteng    during the hail
                                                                                                 fourth  quarter  ofGauteng
                                                                                                                     2013 had a substantial
                                                                           disasters
                                                                       Typical
                                                                      disasters          such
                                                                                   Insurers
                                                                                  such  as the asasathe
                                                                                                     whole.hailinHowever
                                                                                                      storms     storms     in natural
                                                                                                                               Gauteng
90% of the total Net Premium of Typical Insurers.                      impactthe
                                                                      during   on fourth
                                                                                    underwriting
                                                                                            quarterprofit.
                                                                                                       of 2013   had   ain Gauteng
                                                                           during
                                                                       disasters      the fourth
                                                                                      such  as thequarter
                                                                                                      hail        of 2013
                                                                                                             storms          had a
                                                                      substantial    impact
                                                                           substantial       on
                                                                                            impactunderwriting      profit.
                                                                                                        on underwriting
                                                                       during     the fourth      quarter     of 2013 had aprofit.
     Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
                                                                       substantial impact on underwriting profit.
       Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.

       16 l SAIA n NEW HORIZONS
INDUSTRY RESULTS

         NICHE INSURERS: 31 DECEMBER 2013
    NICHE INSURERS: 31 DECEMBER 2013
NICHE INSURERS: 31 DECEMBER 2013

                                Claims
                             Claims
                                   ClaimsRatio:
                                          Ratio: Nichè
                                       Ratio:           Insurers
                                                 Niche Insurers
                                              Nichè  Insurers
     NICHE INSURERS: 31 DECEMBER 2013
                                                              2011   2012   2013
                                                          2011    2012   2013
                                                                                         327%
                                           Claims Ratio: Nichè Insurers              327%

                                                             2011      2012      2013                     123%
                                                                                                       123%
                                                    53%                              61%
                        41% 48%      51% 49% 34%53%
                                                 52% 41%    36% 18%
                                                                 327%  54% 35%    43%
                                                                                  61%     15% 15% 18%
            36% 31%
                 41%                                                54% 35%
                            13% 19%
                           48%   51% 49% 34% 52% 41%     36% 18%               43%     15% 15% 18%
       36% 31%
                        13% 19%
                Property Transportation         Motor        Accident &       Guarantee         Liability      Engineering Miscellaneous
          Property Transportation         Motor        Accident  &      Guarantee
                                                                              -1%          Liability      123%
                                                                                                           Engineering Miscellaneous
                                                               Health
                                                         Health
                                                              53%       -1%                                       61%
                       41% 48%                 49% 34% 52% 41%
                                         51% except                            36%  18%       54% 35%          43%       15% 15% 18%
         A very   31% year for Niche
            36%stable                Insurers,       for an increase in  claims in the Engineering   Class.
                             13% 19%
    A very stable year for Niche Insurers except for an increase in claims in the Engineering Class.
A very stableProperty
              year for Transportation
                       Niche Insurers Motor
                                      except forAccident
                                                 an increase
                                                         &   in claims in Liability
                                                            Guarantee     the Engineering   Class.
                                                                                    Engineering Miscellaneous
                                                             Health      -1%

     A very stable
                    Net Premium Split - Nichè                                               Profitability of Nichè Insurers -
                                                                                  Profitability of Niche
             Net year for NicheSplit
                   Premium      Insurers except for an increase in claims
                           Insurers-%NichèProperty
                                                                          in the Engineering
                                                                        Profitability
                                                                        Profitability   ofNiche
                                                                                       of  Nichè
                                                                                    InsurersR'm
                                                                                                Class.
                                                                                                     Insurers--
                                                                                                    Insurers
                                                                                               - R’bn
                                                                                        R’bn
                                                                                         R'm
                           Insurers %       Property                                          R 6,000
                                                   Transportation
                   Net Premium Split - NicheTransportation
                                                                                          R 6,000R6
                   11%
                    Net Premium Split - Nichè      Motor                                 Profitability
                                                                                              R 5,000 of Nichè Insurers -
             1%           Insurers %
          8%   11%
          1%               Insurers %
                            38%
                                            Motor
                                                   Accident &
                                                                                          R 5,000R5      R'm
      8%                                        Property
                                                                                              R 4,000
                       38%                         Health
                                            Accident   &
         14%                                Health Guarantee
                                                Transportation                            RR4,000
                                                                                             6,000
                                                                                                 R4
                   21%                      Guarantee                                         R 3,000
     14%          11%                              Liability
                                                Motor                                      R 5,000
             1%21%                                                                        R 3,000R3
          8%                                Liability
                           38%7% 0%             Accident   &
                                                   Engineering                                R 2,000
                                                                                           R 4,000
                             0%                 Health
                                            Engineering                                   R 2,000R2
         14%             7%                     Guarantee
                                                   Miscellaneous
                        21%                                                                   R 1,000
                                                                                           R 3,000
                                                    Miscellaneous
                                                       Liability                          R 1,000R1
                                         0.3%
                                    7%
                                         0%            Engineering                         R 2,000R -      Mar-     Jun-    Sep-    Dec-
                                                                                              R -R0
                                                       Miscellaneous                                   Mar- 13 Jun- 13 Sep- 13 Dec- 13
                                                                                           R 1,000
                                                                                          Underwriting  13      13       13      13
    A much more event split of business as expected from                                   Profit/(Loss)
                                                                                                               R 852 R 1,724 R 2,629 R 3,338
                                                                                     Underwriting
A much  Amore
    Niche much  event
            Insurers     splitsplit
                       each
                 more even      ofofbusiness
                               specialist
                                      business    asexpected
                                                      expected
                                              inasdifferent  from from
                                                             classes.
                                                                   Niche                         R-
                                                                                     Profit/(Loss)
                                                                                          UW + Investment
                                                                                                          R0.9
                                                                                                          R 852   RR1.7
                                                                                                                    1,724 RR2.62,629 RR3.3
                                                                                                                                         3,338
                                                                                                           Mar-
                                                                                                              R 1,170Jun-R 2,423
                                                                                                                               Sep-R 3,736
                                                                                                                                        Dec-R 4,792
Niche Insurers each specialist in different classes.
        Insurers, each a specialist in different classes.                                       Income
                                                                                     UW + Investment        13        13        13       13
                                                                                                         RR1.2
                                                                                                           1,170 RR2.4
                                                                                                                    2,423 RR3.73,736 RR4.8
                                                                                                                                         4,792
                                                                                          Income
                                                                                      Underwriting
     A much more event split of business as expected from                              Profit/(Loss)
                                                                                                           R 852 R 1,724 R 2,629 R 3,338
     Niche Insurers each specialist in different classes.                          Similar
                                                                              Similar toUW
                                                                                              to  theInsurers,
                                                                                        the+Typical
                                                                                                       Typicalprofitability
                                                                                              Investment         Insurers profitability
                                                                                                          R 1,170 R 2,423 remains
                                                                                                                            R 3,736 relatively
                                                                                                                                     R 4,792
                                                                                   remains
                                                                              Similar   to  the relatively
                                                                                                  Typical
                                                                                             Income          healthy
                                                                                                            Insurers
                                                                              healthy for the Niche Insurers.           for  the Niche Insurers.
                                                                                                                        profitability
                                                                              remains relatively healthy for the Niche Insurers.
                                                                               Similar to the Typical Insurers profitability
                                                                               remains relatively healthy for the Niche Insurers.
         Note 1: The 31 December 2013 Quarterly Return Statistics are unaudited numbers and subject to potential revisions.
         Note 2: All data obtained from the Financial Services Board (FSB) and reproduced with the permission of the FSB.

                                                                                                                 NEW HORIZONS n SAIA l 17
,,          When the Paris Exhibition (of 1878)
                           closes, electric light will close with it
                              and no more will be heard of it.
                                                                       ,,
                            - Oxford professor Erasmus Wilson

18 l SAIA n NEW HORIZONS
You can also read
NEXT SLIDES ... Cancel