A GLIMPSE AT THE IN­SURANCE IN­DUS­TRY

Finweek English Edition - - INVESTMENT -

Con­duit Cap­i­tal is a really small (mar­ket cap of around R300m) in­surance com­pany that some in­vest­ment houses really love, Can­non As­set Man­agers be­ing one of them. For me valu­ing in­surance com­pa­nies is al­ways very tricky, but the re­cent re­sults from Con­duit have a great ex­pla­na­tion of not only how the busi­ness works but also on how to put a value on the busi­ness. This val­u­a­tion comes in at around R370m im­ply­ing a share price dis­count of al­most 20%. Now, sure, maybe the direc­tors are be­ing overly op­ti­mistic in their val­u­a­tion, but it is still well worth a read even if only to un­der­stand how in­surance com­pa­nies work; and direc­tors that frankly ex­plain what’s hap­pened and how the busi­ness works al­ways get my sup­port.

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