Old Mutual plc is considering its options on South African insurer Mutual and Federal, but chief financial officer Jonathan Nicholls said on Thursday that M&F is "not core and still for sale".

Potential plans to sell M&F to community-based investment group Royal Bafokeng Holdings were terminated during the past quarter, as the parties were unable to agree mutually acceptable terms in the current economic environment.

"Old Mutual is therefore continuing to evaluate various options with regard to its investment in Mutual & Federal," the group said on Thursday.

Nicholls added that the company would say something when it had something to say.

For the March quarter M&F reported gross premiums of R2.6-billion - up six percent over the comparative period - reflecting increases in rates and sums insured in most portfolios, partly offset by the cancellation of certain uneconomical blocks of business where there was no prospect of a return to profitability.

The underwriting account was negatively impacted during the quarter by a significant increase in the frequency and severity of fire losses on the commercial property account and substantial weather-related claims in the personal portfolio. The annualised investment return for the quarter was 8.1 percent which was satisfactory in light of the highly volatile investment environment and the solvency margin at March 31 2008 was 42 percent, unchanged from the figure at 31 December 2007.

As the payment of a final dividend in respect of 2007 was deferred in view of the above discussions, a 'late' 2007 final capitalisation award with a cash dividend alternative of 1.35 rand has now been declared.

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