This was excluding the negative impact of the hedge over two billion rand of equities, which expired in May 2014.

“A loss of 93 million rand was incurred on this hedge during the six months to 30 June 2014. The hedge was not renewed after the final tranche expired in May 2014,” [DATA SNT:Santam] said.

“Positive fair value movements to the value of 63 million rand in Santam’s interest in the Santam Emerging Markets (SEM) general insurance businesses in Africa, India and Southeast Asia enhanced the investment performance.”

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The group also invested a further 40 million rand in the SEM general insurance businesses by increasing its economic participation in the NICO Holdings businesses in Malawi, Uganda and Zambia to 22 per cent, and acquiring a nine per cent economic participation in Oasis Insurance in Nigeria.

Santam, which announced its results for six months ending 30 June 2014 on Wednesday, reported growth of four per cent in net insurance premium revenue to 8.4 billion rand from eight billion rand for the same period in 2013.

Investment income also grew four per cent, from 363 million rand in 2013 to 377 million rand in 2014 while profit before tax jumped 142 per cent to 1.2 billion rand from 515 million rand.

The company’s basic earnings per share increased by 125 per cent from 356 cents in the 2013 period to 799 cents in 2014.

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“Trading conditions in the South African insurance industry remain tough despite some hardening of insurance premium rates following the poor underwriting results reported by industry participants in 2012 and 2013,” said Santam.

“Difficult economic conditions with low gross domestic product growth and higher interest rates are expected to have a negative impact on consumers. Santam continues to manage premium increases selectively through our market and risk segmentation approach on policy renewal.”