ASSET MANAGEMENT
‘Only 0.8% of unit trust funds beat inflation over 5 years’
Only nine, or 0.8%, of the 1 136 unit trust funds in South Africa with a five-year track record have outperformed inflation every calendar year from 2018, Citywire reports. It said this statistic was “all the more remarkable” because for four of the past five years, the annual consumer prices index (CPI) in South Africa was 4.6% or lower.
Citywire said three of the nine funds that surpassed CPI every year for the past five years are resource sector equity funds. “Their performance is therefore due more to market dynamics than to manager skill.”
INSURANCE
Insurers face another influx of flood-related claims
Insurers are bracing for a wave of claims following the declaration by President Cyril Ramaphosa of a National State of Disaster to enable an “intensive, co-ordinated” response to the floods that have devastated parts of seven of South Africa’s nine provinces, IOL reports. Mpumalanga and the Eastern Cape have been most affected by the floods. Flooding was also reported in Gauteng, eastern KwaZulu-Natal, Limpopo, the Northern Cape, and North West.
Santam said the number of claims could not yet be quantified. Most of the claims received so far related to water damage to homes and businesses.
Santam warns of decline in earnings
Santam has warned that its profits could fall by more than a third in its year to the end of December because of the floods in KwaZulu-Natal and bond market volatility. It expects headline earnings per share to decline by between 17% and 37%.
In a trading statement on Tuesday, Santam said it expected its net underwriting margin to be at the lower end of the long-term target range of 5% to 10% of net earned premiums, reflecting an improved performance in the second half of the 2022 financial year.
The underwriting results were significantly impacted by adverse weather conditions and floods in KwaZulu-Natal during the first half of 2022, in addition to increased claims frequency and inflation.
It expects “strong growth” in gross written premiums.
Naked raises $17 million in Series B funding
Insurtech company Naked announced yesterday that it has raised $17 million (about R290m) in Series B funding.
The funding round is being led by the International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets. The German Development Finance Institution (DEG) and Naked’s original investors, Yellowwoods and Hollard, are also taking part in the funding round.
The IFC and the DEG are backing Naked in line with their goals of investing in companies that can make a social impact, increase competition in financial services in Africa, and foster financial inclusion, the company said.
Preliminary approval for Sanlam-AfroCentric transaction
Sanlam, Africa’s largest insurer, said on Tuesday that it has received preliminary approval from AfroCentric’s shareholders buy a controlling stake in the company. AfroCentric owns South Africa’s second-biggest medical scheme administrator, Medscheme.
Shareholders representing 46.4% of AfroCentric’s issued shares have backed the proposed deal, exceeding the required minimum share percentage of 36.9%. Other outstanding conditions must still be fulfilled for the partial offer to be deemed wholly unconditional.
Sanlam announced the details of the proposed transaction in October 2022.
BANKING
Fees for Pay-As-You-Use business accounts compared
One of the cheapest and most flexible accounts for entry-level businesses and entrepreneurs is the Pay-As-You-Use (PAYU) business account. BusinessTech compared the fees of a PAYU business account from Absa, FNB, Standard Bank, Nedbank, Mercantile Bank (a division of Capitec Bank), and TymeBank.
The comparison took the following features into account: monthly account fee; external debit order fee; electronic payment fee; card purchase fee; and cash withdrawals and deposits at an ATM.
