Liberty swings to first-half profit

South African insurer Liberty Holdings swung to a first-half profit on Thursday, as a recovering economy led to fewer lapses on policy payments, but maintained a cautious outlook.

Liberty, majority owned by South Africa’s Standard Bank, said headline earnings per share totalled 351,9 cents in the six months to end-June, compared with a loss of 421,9 cents in the same period a year earlier.

Africa’s third-largest life insurer by market value had forecast headline earnings between 325 cents and 400 cents per share.

Headline earnings, the main profit gauge in South Africa, exclude some one-time items.

South African insurers were hit hard by the economic downturn, as debt-burdened customers let insurance policies lapse and declining equity markets hit investment portfolios.

Unemployment and household debts remain high, even after Africa’s largest economy exited a recession last year.

Liberty rivals Sanlam and Metropolitan have given upbeat outlooks for 2010, helped by an expected improvement in equity markets.

Shares of Liberty have gained 12% so far this year, outperforming a 9,7% rise in Johannesburg’s index of life insurance companies.—Reuters

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