Liberty Holdings Remains Operationally Strong

The Chief Executive Officer of Liberty Holdings reassured that the insurance group remains operationally strong, despite the fact that a R1.2 billion headline loss was reported in the first half of the year.

Bruce Hemphill said that Liberty Holdings would make important changes in order to see a reverse in the numbers that were reported up till June 2009, including strengthening its balance sheet and continuing to manage market risk.

One of the biggest problems facing Liberty Holdings is the rising trend of insurance policy lapses. The group said that it would be targeting these policy lapses to stem losses in the second half of the year.

Hemphill said in a statement that the group was not in a bad position overall. "Our capital position is healthy, we have maintained our cash distribution, costs have been well controlled, new business sales are satisfactory and retail cash flows are good," he said. "Our diversification

strategy is on track and our product and geographical expansion is progressing well."

Several analysts commented on Liberty Holding's current position and one of them commented that "there is no other scenario except an aggressive recovery in the second half. It all depends whether they can wipe out the first half loss."

Another analyst said that "the potential upside for earnings could be big if they get the persistency issue right, but fixing persistency in a weak economy may take some time."