Related Articles
Top Stories
May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
May 28 2012 07:53
The City of Cape Town has spent R175m running the Myciti bus service since the Soccer World Cup compared to an income of R35m, a report says.
May 27 2012 13:09
The oversupply of golf estates has claimed another victim.
Johannesburg - Shares in medical insurance specialist Discovery jumped 5.6% on Thursday morning as it reported a 21% increase in operating profit to R746m for the six months to end-December 2008.
PruProtect, Discovery's UK life assurance joint venture with the Prudential plc, performed "significantly below expectation", with its operating loss deepening from R42m to R104m. However, Discovery said PruProtect's operating losses are "largely in line with expectation" from a financial perspective.
The wind-down of Destiny Health, announced in Discovery's last financial year, progressed in line with its $30m budget and Discovery announced a membership base decrease from 33 000 to 3 000 in February 2009.
Embedded value (EV), a valuation method generally used in the life insurance industry, rose 20% to R36.17 per share. At current market values the share is trading at a 32% discount to EV.
Discovery defines embedded value as the sum of the free surplus attributed to the covered business, the required capital to support the in-force covered business and the present value of future shareholder cash flows from the in-force business minus the cost of required capital and secondary tax on companies (STC).
"Less than 3% of members reduced their benefit choices, while 97% of members opted to stay at or enhance their current benefit choice," said Discovery in its interim statement.
Discovery's income statement shows that claims have increased by 22% from R1m to R1.2m. However, premium revenue has increased by nearly 30% from R1.9m to R2.5m in the comparable period.
- Fin24.com