Metropolitan Insurance Profits Climb

September 2 - South Africa's fourth largest insurance company, Metropolitan, released financial figures for the first half of 2010.

The group said that in the six months ending June, 2010, Metropolitan's profits rose 13%.

This was mainly as a result of an improving economy that gave strength to the group's low and middle income consumers.

Metropolitan also reported that its net insurance premiums rose by 3% to nearly R5 billion.

Core headline earnings were 70 c per share in the first half of the year, compared to 62 c that was recorded in the same period in the year before.

Metropolitan is on the verge of being absorbed by Momentum, following a historic acquisition deal recently.

The group said that a rise in the value of investments, as well as a well-functioning cost cutting policy helped see profits rise.

Metropolitan started to see an improvement in business in May already after reporting "unexpected signs of recovery".

The South African economy has slowly started to improve, and more customers are buying products compared to the year previously when many allowed their policies to lapse as they could not afford to keep up with their payments.

Metropolitan has seen its shares rise by 19% this year thus far.

The merger between Metropolitan and its rival Momentum will form the third largest listed insurance group in South Africa and will have an embedded value of R30 billion.