Gloom for insurers in 2003/04

THE Namibian life assurance industry faced low inflation, little economic growth and a population ravaged by HIV-AIDS during the 2003/04 financial year.

Lennie Louw, Managing Director of Channel Life Namibia on Friday said: “Market shake-out and consolidation is expected in the foreseeable future.” According to Louw, there are already 10 life insurance players in Namibia and the industry is bound to see some changes as it is a “very small market for 10 players”.However, the competition has not hampered his company’s performance.With 42 000 new policies sold in 2003/2004 – an increase of 68 per cent – Channel Life Namibia is growing faster than ever.The company presented the financial results of its 2003/2004 year on Friday, characterising itself as having produced a, “strong performance in a challenging environment”.Louw said Channel Life Namibia’s embedded value – the net asset vale plus the value of all business on the books at the moment – increased by 27 per cent over the last financial year to N$88 million.Headline earnings of N$10,3 million were recorded for the period and the company provided a 49 per cent on equity employed, which Louw said should make the owners “more than satisfied”.The company is owned by Channel Life South Africa which belongs to the PSG group of companies listed on the JSE in South Africa.However, Louw said it operates as a totally independent company and described it as a Namibian life assurance company.”All decisions and operations are made in our offices in Namibia,” he said.The company has become a significant figure on the local insurance industry scene and last year the company secured 20 per cent of the new business market share, Channel Life Namibia said.A shift away from it investment business, and greater concentration on risk type businesses such as life insurance, has paid off for the company, Louw pointed out.He explained that this contributed to Channel Life’s signing about 160 new policies on average every working day for the year in question.Total benefits paid out during the year in review amounted to N$176 million while the company spent a further N$50 million on commissions and expenses, Louw said.The company is still growing organically.With a strong presence in the middle to lower income market, the company is in the process of slowly increasing its public profile.Already staff represent the demographics of Namibian society and at the end of this month they intend to submit their first Affirmative Action Plan, 18 months after staff numbers reached 50 as stipulated by law.The company now employs about 80 people.Louw said Channel Life will now concentrate on consolidating its organic growth.”We are not aggressively looking at any acquisition at this stage, but if there is an opportunity we will look at it seriously,” he said.According to Louw, there are already 10 life insurance players in Namibia and the industry is bound to see some changes as it is a “very small market for 10 players”.However, the competition has not hampered his company’s performance.With 42 000 new policies sold in 2003/2004 – an increase of 68 per cent – Channel Life Namibia is growing faster than ever.The company presented the financial results of its 2003/2004 year on Friday, characterising itself as having produced a, “strong performance in a challenging environment”.Louw said Channel Life Namibia’s embedded value – the net asset vale plus the value of all business on the books at the moment – increased by 27 per cent over the last financial year to N$88 million.Headline earnings of N$10,3 million were recorded for the period and the company provided a 49 per cent on equity employed, which Louw said should make the owners “more than satisfied”.The company is owned by Channel Life South Africa which belongs to the PSG group of companies listed on the JSE in South Africa.However, Louw said it operates as a totally independent company and described it as a Namibian life assurance company.”All decisions and operations are made in our offices in Namibia,” he said.The company has become a significant figure on the local insurance industry scene and last year the company secured 20 per cent of the new business market share, Channel Life Namibia said.A shift away from it investment business, and greater concentration on risk type businesses such as life insurance, has paid off for the company, Louw pointed out.He explained that this contributed to Channel Life’s signing about 160 new policies on average every working day for the year in question.Total benefits paid out during the year in review amounted to N$176 million while the company spent a further N$50 million on commissions and expenses, Louw said.The company is still growing organically.With a strong presence in the middle to lower income market, the company is in the process of slowly increasing its public profile.Already staff represent the demographics of Namibian society and at the end of this month they intend to submit their first Affirmative Action Plan, 18 months after staff numbers reached 50 as stipulated by law.The company now employs about 80 people.Louw said Channel Life will now concentrate on consolidating its organic growth.”We are not aggressively looking at any acquisition at this stage, but if there is an opportunity we will look at it seriously,” he said.