investor’s notebook
STEPHEN CRANSTON: Gauging the economy
Life insurers are good indicators for the economy as policies are often the first thing to be cancelled when a client is short of cash
Sometimes the best way to get a sense of the economy is to dive into a company’s trading position. Life insurers are good indicators for the economy as policies are often the first thing to be cancelled when a client is short of cash. And it is only when they feel out of the crisis that they sit down and plan regular contributions into retirement annuities and other forms of savings. Of the life companies, MMI is the most useful proxy for the market. It has a good balance between the top and bottom end of the market, unlike Discovery and Liberty which focus on the top. Old Mutual is still so diversified that it has been able to skirt over the detail of its SA business, and Sanlam is still increasing market share and improving margins through management action so it is hard to know what is based on client behaviour and what on the management team’s action.When the accomplished broadcaster Dan Moyane told me about the merger of Momentum and Metropolitan to form MMI, it was March 31, 2...
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