AVBOB Integrated Annual Report 2018

TOTAL ASSETS The Group has delivered excellent results for the year. Once again all three South African businesses achieved growth and positive operating results. The strength of our balance sheet continues to improve, with total assets increasing by 14.3% to R17,1 billion. Total assets have increased 5.2 times from R3,3 billion at 30 June 2006. PREMIUM INCOME Group results As reported by Statistics South Africa in their report on mortality and causes of death in South Africa, 2016, the number of deaths in South Africa declined by 25.6% from 2006 to 2016. Despite lower mortality and tough market conditions as a result of the low or negative growth in the local economy and stiff competition, the Funeral Service Division managed to grow the number of funerals conducted for the sixth year in a row. The Insurance Division continued to perform exceptionally well, with premium income growing by 16.1% to R3,6 billion. Investment returns also benefited from the JSE all share index increasing by 11.6%. Foreign investments were positively impacted by the weakening of the rand from R13,06 to R13,71 against the US Dollar and the 13.7% increase in the Dow Jones. NET NEW BUSINESS POLICYHOLDER BENEFITS New business increased by 12.4% to R1,4 billion as a result of the increase in the number of policies issued. The number of policyholders continue to increase due to an improved understanding of the free funeral benefits offered by our mutual status. Net new business only increased by 9.2% to R572,1 million due to a 16.5% increase in lapses. Benefits paid to policyholders grew further due to an 11.4% increase in the number of claims and their associated insured values including special bonuses. Notwithstanding cumulative surpluses of R10 billion allocated to provide additional benefits to the Society’s policyholders to June 2018, consisting of special bonuses, free funeral benefits and the improvement of benefits due to Regulation 5, the Capital Adequacy Ratio increased to 5.1 times compared to 4.8 times in the previous year. R7,2 Billion R11,1 Billion R13,8 Billion R17,1 Billion 2018 2012 2014 2016 R1,5 Billion R2,0 Billion R2,7 Billion R3,6 Billion 2012 2014 2016 2018 230 317 456 572 2012 2014 2016 2018 R Million 478 667 927 1 359 2012 2014 2016 2018 R Million 21