Group overview

RMB-SI Investments

RMB-SI Investments is active in the short- and long-term insurance sectors. It creates customised insurance and financial risk solutions for large corporates by using innovative financial structures.

Over the past two years RMBSI diversified its core business of providing specialist insurance services by entering into the underwriting manager agency (“UMA”) market. This initiative opened up a new market to build the annuity base income and to do structured deals on the back of the UMA business with the specialised skills within the structured team. RMBSI added two more start-up UMA’s to its book of business during 2009. With the addition of three more agencies in the 2010 year, RMB Specialised Lines have become a noticeable contender in the UMA market.

The current economic environment created opportunities to offer solvency relief products to the local insurance market as the Group is able to optimise it capital structures efficiently.

The pressure on earnings in 2009 was evident due to the loss of a large retail client following the client’s decision to conduct its insurance operations in-house. Notwithstanding, RMBSI’s net profit after tax of R79 million for the year ended 30 June 2009 is down by only 15%.

RMBH’s attributable share of RMBSI‘s normalised earnings for the year amounted to R60 million (2008: R72 million).

In the 2010 financial year it will be difficult to build up the income base to past profit levels. The structured transactions with once-off profits have been very successful in the past, but there is a greater urgency to create more annuity income.