Sanlam, which among other things offers car insurance and home insurance to the public, has reported a rise in its first-half profit.

Normalized headline earnings per share for the half year to June climbed 34 percent to 78.5 cents, compared to 58.8 cents in the previous corresponding period.

According to the insurance company, its earnings grew because of relatively stable equity markets over the first half of 2009.

Sanlam's overall new business gained over the first six months of this year increased by 1 percent to 51 billion rand, although the insurer said new business at its personal finance and private investments units dropped. The reason for this is that its middle-income retail target market remained under pressure.

South African insurers, similar to insurance companies worldwide, are feeling the global economic crisis, for instance in the decreased demand of consumers for insurances. This is due to the relatively high interest rates, inflation and rising personal debt.

Furthermore, many consumers - who are also feeling the pinch - are relapsing their monthly payments.

Sanlam said trading conditions were expected to remain challenging for the rest of its 2009 financial year. The firm said in June volatile market conditions would have a major impact on its full-year earnings, after it posted a drop in four-month profit.

Competing insurance company Metropolitan reported a decreased first-half profit while Santam, whichis majority-owned by Sanlam, mentioned that first-half returns were hit by a rise in high-value property fire claims.

Source: Business Report