Highlights:
• Diluted normalised headline earnings, the Group’s primary earnings metric, increased by 9% to R0.9 billion for the first quarter.
• Diluted normalised headline earnings per share increased by 13% year-on-year.
• New business volumes, excluding Momentum Corporate, up 12% year on year.
Momentum Metropolitan delivered a pleasing set of results for the first quarter of the F2020 financial year. Diluted normalised headline earnings per share increased by 13%. Most business units were able to grow earnings year-on-year. Star performers for the period were Guardrisk, the Health operations, and Momentum Investments.
New business volumes for Momentum Life declined marginally to R2013m. Value of new business increased to R26 million, which represents a new business margin of 1.3%.
New business volumes for Momentum Investments increased by 20% to R6.7 billion. Value of new business improved to R30 million mainly due to volume growth in offshore LISP and local annuity products.
Metropolitan Retail’s new business volumes were 1% lower than in the preceding period. Although lower, it is important to note that this result was delivered by a 20% smaller distribution force. Consequently, margins on new business improved.
Momentum Corporate’s new business volumes declined by 68% to R2.4 billion. The R5 billion single premium with-profit annuity transaction in the previous period explains the decline year on year.
Guardrisk delivered double-digit new business growth, with strong contributions from the mining rehabilitation and underwriting managers divisions. There has been a strategic focus at Guardrisk to grow their own underwriting activities and this is reflected in the 17% growth in underwriting profits earned by Guardrisk.
Momentum Short-term Insurance’s net earned premiums grew by 17%, continuing the positive trend observed over recent quarters. Earnings, however, declined marginally due to a 3% increase in the claims ratio (62% vs 59%) due to weather-related claims during July 2019. We have recently received Competition Tribunal approval for our acquisition of Alexander Forbes Insurance. The only outstanding condition is approval from the Prudential Authority.
Momentum Metropolitan Africa improved sales by 9%. New business margins also improved.
Hillie Meyer, Momentum Metropolitan Holdings Group CEO, said: “Overall, we are satisfied with the results, which are well in line with our three-year turnaround plan. The plan is to continue focusing on bolstering our product and distribution capabilities, as well as on enhancing our client service and value proposition.”
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