MMI takes a knock from falling underwriting profit and muted markets
MMI Holdings said core headline earnings fell 16% to R3.2bn for the year to June 2016, hurt by lower underwriting profits and muted investment markets."This has been a difficult operating environment for the group as consumers are facing increasing pressure on their disposable income," group CEO Nicolaas Kruger said on Wednesday.MMI recorded embedded value (EV) earnings for shareholders of R5.2bn, reflecting a 13% return on EV.The embedded value of a life insurance company refers to the present value of future cash flows. MMI recorded an EV of R43bn for the period."New business volumes on the present value of premiums basis increased 35% on the prior year, with strong growth in both the Corporate and Public Sector and the International segments," MMI said in a statement.The value of new business declined 11% to R850m, following an "exceptionally strong" previous year, MMI said. This was largely attributable to higher discount rates.Discounting determines the present value of an expe...
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