UNDERWRITING LOSS
Mutual & Federal annual results hit by big claims
Short-term insurers have been battling weak economic growth and high unemployment
Short-term insurers, including Mutual & Federal, would post strained underwriting results for the 2016 financial year following a number of large claims last year, said Mutual & Federal CEO Raimund Snyders. "[Last year] was tough from a claims perspective," Snyders said on Thursday, citing hailstorms, countrywide fires and floods in Johannesburg. Insurers incur underwriting losses when the amount they pay out in claims and claims administration exceeds the amount collected in premiums. For the six months to June 2016, Mutual & Federal posted a R57m underwriting loss — a 133% decline on the previous comparable period. Rival Santam posted an underwriting profit of R618m for the same period — a 24% decline on the prior period. Short-term insurers have been battling weak economic growth and high unemployment, leading to fewer individuals buying assets that need to be insured, resulting in lower premium income.
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