Presentation to Investment Analysts Society of Southern Africa - PowerPoint PPT Presentation

Loading...

PPT – Presentation to Investment Analysts Society of Southern Africa PowerPoint presentation | free to download - id: 6f162b-MzkxM



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Presentation to Investment Analysts Society of Southern Africa

Description:

Presentation to Investment Analysts Society of Southern Africa – PowerPoint PPT presentation

Number of Views:54
Avg rating:3.0/5.0
Slides: 54
Provided by: Libe54
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Presentation to Investment Analysts Society of Southern Africa


1
(No Transcript)
2
Presentation to Investment Analysts Society
  • 3rd/4th March 2004
  • www.liberty.co.za

3
Operating climate
  • Increasing compliance and regulatory requirements
  • Low interest rate/low inflation environment
  • Strengthening of the Rand
  • Volatile investment markets
  • Risk averse investors
  • Perception of industry

4
Operations
5
Liberty Personal Benefits - market share
  • Strong Excelsior investment product sales
  • Property-backed products very popular
  • Risk product launched Lifestyle Protector
    R120 million sales since launch

6
Liberty Personal Benefits average recurring
premiums
30 Sept 2003 Rm
31 Dec 2002 Rm
Change
  • All offices
  • Large offices
  • Liberty Personal Benefits
  • LPB as of all offices
  • LPB as of large offices

2 141 2 843 6 796 316,2 238,1
2 298 2 754 6 443 280,4 234,0
(7 3 5
)
Source LOA statistics
7
Liberty Personal Benefits
  • Represents 70 of total business based on value
    of liabilities (low percentage smoothed bonus
    business)
  • Focus on
  • Integration of Healthcare operations
  • Restructuring of operations
  • Customer service and costs
  • Implementation of FAIS legislation
  • Partial commission uncapping
  • Further leveraging channel capabilities

8
Liberty Corporate Benefits
  • 9 reduction in headcount
  • Building on packaged product model
  • Focusing on service delivery
  • Risk margins maintained (despite HIV/AIDS)
  • Standard Bank opportunity
  • Small pension fund audit exemption withdrawal

9
Liberty Corporate Benefits (continued)
  • IEB purchase price R130 million
  • Smooth integration to date
  • 2-3 years to rationalise fully
  • Efficiency opportunity
  • Current performance approximating expectations

10
Consultancy
  • Agency Division
  • Introduction of graduated managers from the
    Academy
  • Additional branches created
  • Franchise Division
  • Elimination of non-producing franchises
  • Productivity enhanced

11
Consultancy (continued)
  • Broker Division
  • Expanded number of supporting brokers
  • Gauteng focus
  • Administration hubs provide a higher level of
    service
  • SBFC
  • Increased manpower benefits in 2004
  • Consumer consultants strategy

12
Consultancy (continued)
  • Legislation
  • FAIS implementation
  • Commission de-regulation
  • FICA implemented

13
Properties
Change
2003
2002
  • Portfolio value (Rm)
  • Comprising
  • Office buildings ()
  • Shopping malls ()
  • Hotels ()
  • Other ()

10 449,8 20 65 12 3 100
9 601,8 22 64 11 3 100
9
5 year compound annual bonus rate to RA policy-
holders of 11,6 vs headline CPI of 5,2
14
Properties (continued)
  • Property sales amounted to R150,1 million in
    2003
  • Liberty Midlands Mall completed in 2003 - valued
    at R325 million
  • 50 of Greenacres Shopping Centre acquired for
    R150 million
  • Vacancies at 31 December 2003 13,9 (2002
    12,1)

15
STANLIB Total assets under management (excluding
common assets)
2003 Rbn
2002 Rbn
Change
  • Life funds
  • Segregated funds
  • Unit trusts
  • Structured products and other
  • Money market as of total

59 55 40 24 178 14
53 48 29 19 149 11
12 15 38 26 19
16
STANLIB (continued)
  • Net inflows positive R12 billion
  • Investment performance mixed
  • Good fixed interest performance
  • Balanced portfolios underperformed median by 1
    to 2
  • Returns generally acceptable in absolute terms
  • Normalised earnings up 4 to R136 million

17
STANLIB (continued)
  • Integration costs and other once-off costs higher
    than expected
  • Staff numbers reduced by 98 people (net)
  • Annualised cost saving of approximately R30
    million
  • STANLIB brand now well-established in both retail
    and institutional markets
  • Looking for improved investment performance

18
Ermitage Assets under management
Change
2003 USm
2002 USm
  • Hedge funds
  • Long-only funds
  • Money funds
  • Third party funds as
  • of total funds

1 292,7 1 059,5 600,3 2 952,5 41
806,8 791,6 667,3 2 265,7 44
60 34 (10 30
)
Operating profit up 117 in Pounds Sterling
19
The year in numbers
20
Features 2003/2002
2003 Rm
2002 Rm
Change
  • Indexed new business
  • Individual
  • Corporate
  • Value of new business
  • Net cash inflows from insurance operations
  • New business margin

3 807,8 3 184,3 623,6 608,9 4 497,0 20
3 634,2 3 090,2 544,1 604,6 4 501,3 20
5 3 15 1 - -

21
Features 2003/2002 (continued)


Change
2002
2003
  • Headline earnings per share (cents)
  • Headline earnings per share pre AC 133 (cents)
  • Final dividend per share
  • Embedded value per share (Rand)
  • Capital adequacy requirement (times covered)
  • 346,4
  • 359,6
  • 116,0
  • 57,58
  • 2,6
  • 391,5
  • 391,5
  • 116,0
  • 55,28
  • 3,0
  • (11
  • (8
  • -
  • 4
  • )
  • )

22
Headline earnings
2003 Rm
2002 Rm
Change
  • Operating profit from insurance operations net of
    tax
  • Revenue earnings shareholders funds
  • Preference dividend
  • Headline earnings
  • Headline earnings pre-AC 133







719,5 324,8 (95,2 949,1 985,5
889,1 261,6 (81,9 1 068,8 1 068,8
(19 24 16 (11 (8
)
)
) ) )
23
Operating profit from insurance operations
2003 Rm
2002 Rm
Change
  • Operating profit from insurance operations Befo
    re AC 133 adjustment AC 133 adjustment

719,5 755,9 (36,4
889,1 889,1
(19 (15
)
)
)
  • 2002 includes releases from the life fund of
    approximately R350 million after tax
  • Improvement in weighted policyholder investment
    portfolio in 2003
  • Implementation of AC 133

24
Investment returns (Weighted average of equity,
managed and foreign assets portfolios)
25
Expenses
Change
2003
2002
  • Total group expenses
  • Subsidiaries
  • Company expenses
  • Insurance expenses
  • Individual
  • Corporate Benefits

1 860,9 (381,8 1 479,1 1 281,8 935,1 346,7
1 690,9 (462,6 1 228,3 1 150,6 864,4 286,2
10 (17 20 11 8 21
)
)
)

Includes IEB costs of R33 million
26
Expenses cost per policy
2003
2002
  • Renewal cost per policy increased/(decreased) by
  • Acquisition cost per policy increased/(decreased)
    by

6,5 7,2
(1,6 (1,3
)
)
Significant non-recurring expenses incurred in
2003
27
Non-recurring expenses
  • Non-recurring expenses of R111,3 million in 2003
  • Retrenchment and discontinued salary costs
  • Previously incurred corporate activity costs
  • Pension fund provision
  • Post-retirement medical liability increase
  • Retention bonuses
  • Non-capitalised renovation costs
  • Impairments and other provisions

28
Revenue earnings shareholders funds
2003 Rm
2002 Rm
Change
  • Financial services operations
  • Listed investments
  • Other

199,9 32,9 92,0 324,8
159,6 39,9 62,1 261,6
25 (18 48 24
)
  • Electric Liberty investment portfolio trading
    profit of R47 million in 2003
  • Liberty Ermitage headline earnings of R43
    million up 54
  • Higher cash balances and preference shares
    increased other earnings

29
Future earnings
  • International Accounting Standards
  • Stochastic modelling of investment guarantees
  • Investment returns impact 10 entitlements

30
Embedded value
2003 Rm
2002 Rm
Change
  • Shareholders funds
  • Net value of life business in-force
  • Fair value adjustment
  • Total
  • Embedded value per share (Rand)

8 782,2 6 493,8 540,9 15 816,9 57,58
8 588,1 5 700,4 838,1 15 126,6 55,28
)
2 14 (36 5 4
31
Fair value adjustment
2003 Rm
2002 Rm
Liberty Group Properties Liberty Ermitage
Jersey STANLIB Carrying value of in-force
business acquired from Investec Employee
Benefits
216,0 140,0 306,9 (122,0 540,9
240,0 190,4 407,7 838,1
)
  • Liberty Ermitage multiple reduced from 15 to 10
  • STANLIB valued at approximately R1,4 billion

32
New business percentage increase
Individual Business
Corporate Business
Total
  • Recurring
  • Single
  • Total
  • Index

6 (7 (4 3
1 63 47 15
6 3 3 5
) )
Excludes IEB business acquired
33
Market share individual business (including
Charter)
30 Sept 2003
31 Dec 2002
  • Individual recurring
  • Individual singles

23,5 22,4
23,6 20,2
  • Sales force productivity
  • Independent broker support
  • Investment performance
  • Property portfolio
  • Lifestyle protector

Source LOA stats plus Charter Life
34
Value of new business
2003
2002
  • Value of new business (Rm)
  • New business margin ()
  • Individual ()
  • Corporate ()

608,9 20 22 8
604,6 20 22 11

35
Net fund inflows
2003 Rm
2002 Rm
Change
  • Total premiums and inflows under investment
    contracts
  • Claims, policyholder benefits and payments under
    investment contracts
  • Net fund inflows
  • 18 121,8
  • 13 624,8
  • 4 497,0
  • 16 415,1
  • 11 913,8
  • 4 501,3
  • 10
  • 14
  • -
  • Two investment only funds to STANLIB of
  • approximately R700 million

36
Capital adequacy cover
2003
2002
  • Capital adequacy
  • requirement (Rm)
  • Times covered

3 402,7 2,6
2 856,6 3,0
Charter Life investment guarantees
37
Dividend
2003 cents per share
2002 cents per share
162 116 278
162 116 278
Interim Final
38
When we last spoke
39
Focus areas for second half 2003
  • Improve service levels
  • Emphasis on cost reduction
  • Domestic operations/other market segments and
    Africa
  • Renewed emphasis on people
  • Address capital situation

40
Since we last spoke
41
Improve service levels
  • Appointed MD Group Customer Service Alan
    Woolfson
  • Appointed internal ombudsman
  • Launching staff initiative
  • Tracking system for complaints

42
Cost reduction
  • Cost reduction initiated second half 2003
  • Cost savings of approximately R75 million for
    Liberty
  • Reduced net headcount
  • Liberty 135
  • STANLIB 98
  • General staff incentive scheme introduced based
    on cost reduction targets
  • No real cost growth budgeted for 2004

43
Domestic operations/other market segments and
Africa
  • Some internal issues
  • LPB restructure
  • IT centralised (again)
  • Finalised Healthcare integration into LPB
  • Charter explores new opportunities (see next
    slide)
  • Namibia life license
  • Stanbic Africa footprint offers future
    opportunity
  • Canned future offshore expansion for now
  • Western Cape?

44
Charter Life eventually doing something
Business as usual
New business initiatives
(Long-term repositioning strategy) - LSM 5-8 -
Products - Administration - Marketing -
Distribution
- Grow CCs aggressively - Continue IFAs,
networking and Liberty Agency/Franchise
Charter Life 2004
Customer service
Cost management
Right people - right jobs
45
People
  • Four new board appointments
  • Appointed MD Charter Life Bobby Malabie
  • Appointed CEO STANLIB Bruce Hemphill
  • Looking for marketing head
  • IEB staff integrated well
  • Employment equity remains an issue
  • Restructured STANLIB

46
Capital management
  • More proactive capital management
  • Capital committee formed
  • Sold 2 million Edcon and 1 million GoldFields
  • Restructured and cleaned up portfolios
  • Overcapitalised but
  • BEE contingency
  • stochastic modeling
  • be patient!

47
In addition
  • Market uptick thank heavens!
  • Financial Sector Charter signed
  • Dedicated Exco member heading initiative
  • Implementation committee set up
  • STANLIB BEE deal finalised
  • AC 133 implemented
  • Life product launched

48
Liberty Foundation focus on education
  • Mindset Network began broadcasting
  • Pilot programme initiated for Health Channel and
    we continued with
  • Liberty Learning Channel on SABC
  • Learn.co.za website
  • Liberty/Sunday Times ReadRight project
  • Working closely with Standard Bank

49
Focus areas for next six months nothing
complicated
  • Continue -
  • to improve service levels
  • emphasis on cost reduction
  • focus on domestic operations/other market
    segments and Africa
  • emphasis on people

50
Focus areas for next six months nothing
complicated
  • Continue
  • monitoring capital position
  • Financial Sector Charter implementation
  • and in addition we will
  • reposition brand
  • focus on product development

51
Focus areas for next six months nothing
complicated
Everything we do must focus on adding value
for our customer
52
Panel
  • Myles Ruck Chief Executive
  • Andrew Lonmon-Davis Statutory Actuary
  • Deon de Klerk Chief Financial Officer

53
(No Transcript)
About PowerShow.com