Narrower Focus ‘Will Benefit Indequity’

Johannesburg, Jun 07, 2010 (Business Day/All Africa Global Media via COMTEX) -- INSURANCE company Indequity was set to benefit from an increased focus on its core business after unbundling its investment operations into a separate nonlisted entity, financial director Sandarie le Roux said on Friday.

"It's better that we don't get sidetracked at the moment - the two businesses didn't really complement each other," she said.

Indequity provides short-term insurance to wealthy individuals, with a focus on vehicle and home contents insurance.

The company had no plans to move outside that niche, and would continue to focus on professional graduates, Ms Le Roux said. "These people tend to look after their property." With the recession behind it, however, the company would look to grow the insurance business by targeting increased referrals from brokers.

Income from insurance operations rose 12% to R13,6m in the six months to March. But the downturn had brought a rise in fraudulent claims, she said. "When everyone needs money you tend to get more people putting in false claims, so you have to really monitor the situation." That close scrutiny helped limit claims incurred in the period to R7,9m, an annual rise of just 0,4%.

Total revenue declined 2,5% to R13,9m thanks to a sharp decline in investment income, which fell from R1,2m to R304 000.

Headline earnings rose from 1,2c to 1,43c per share.