GWP RISE BY 9% AT MUTUAL & FEDERAL, BUT UNDERWRITING RESULT FALLS TO LOSS

South Africa-based Mutual & Federal, the non-life insurance arm of locally based, London-listed Old Mutual, has reported an underwriting loss of £10m for 2012, compared with a £27m gain (at constant currency) in 2011. This was despite a 9% increase in gross written premiums (GWP) to £746m, up from £681m the previous year. The underwriting loss was attributed to an increased number of severe weather losses, continued start-up losses at its direct joint venture with OMSA's Mass Foundation business iWyze, and higher levels of commercial fire claims. The policy count at iWyze was up 33% year on year and it has now sold more than 50,000 policies. There was an absolute fall of £5m in operating costs. Old Mutual was bullish about the prospects for insurance in Africa, noting that gross domestic product in the continent had risen from $587m in 2000 to an anticipated $2trn in 2012 and a likely $2.5trn by 2016. The company said that the increasingly urbanized youthful population was under-serviced by the insurance industry. Old Mutual saw the acquisition of Oceanic Bank's life assurance operation in Nigeria as a template for Old Mutual's expansion throughout the continent. "While initially it will focus on selling credit life and group life assurance schemes, this will be supplemented by the roll-out of the full retail mass market product suite in 2013"Old Mutual is in the process of acquiring Oceanic's Nigerian general insurance business from Ecobank. Once that deal is completed it will operate under the Old Mutual brand. Meanwhile, in Kenya the plan will be to start with burial insurance – which is included in the life sector, before expanding the product range over time. In South Africa the intention is to make iWyze "the leading short-term insurance brand in the market".