MiWay records strongest profit growth since it began

Sanlam subsidiary MiWay recorded its strongest growth in profit since it was started eight years ago with a premium growth of 19 percent.

Johannesburg - Sanlam subsidiary MiWay recorded its strongest growth in profit since it was started eight years ago with a premium growth of 19 percent, it said yesterday.

The short-term insurer said it had added R219 million to its holding company Santam, despite tough trading conditions and a declining economy. Reporting on its year-end results to December, MiWay said it had invested R56m in two new initiatives, Business Insurance and Direct Brokers – an investment that reduced its profits to R163m.

“We embrace tough economic times rather than blaming it for poor performance. Tough times present many opportunities to innovate and find smarter ways of doing things. It also creates a new market for customers looking for better value solutions,” chief executive René Otto said.

“We attribute our success to our ability to capitalise on these opportunities, our can do attitude and our relentless focus on the fundamental profit drivers of our business. We have built a strong, robust business despite tough economic conditions, in a relatively short period. The strength of our brand is evident from the early successes of our new initiatives,” Otto added.

The company reported that its gross written premium had reached R1.77 billion, up 19 percent.

It said its underwriting margin increased 8.2 percent, while its client base grew by more than 253 000.

Otto said he was optimistic that MiWay would produce similar results in the coming year if it kept its focus on the fundamentals.

Challenges

“The onus is on us to find solutions to the challenges that we face and to make the most of the different opportunities offered by tough economic conditions,” he said. “We launched MiWay in 2008 in the middle of the global credit crunch, yet we found a way of not only surviving but thriving. We have done it before and we will do it again.”

Otto said the company had identified three areas that it wanted to exploit in order to grow its business. “Organic growth of the current book – 75 percent of this is churn from our competitors and 25 percent is new entrants into the market; secondly through our aggressive expansion of our three new initiatives, which are business insurance, direct brokers and MiWay life; and lastly, through our new initiatives. We are busy with some, but we are not in a position to share with the public yet,” he concluded.

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