MMI trading update shows bleak season for insurers
Flat investment markets, the strong rand and weak underwriting flag lower results for the life companies, says analyst
MMI’s Monday trading update, indicating a decline in core headline earnings of up to 10% and a drop of 20% in headline earnings for the six months to December, showed insurers could expect weaker results this reporting season, which kicks off this week. The insurer reported core headline earnings of R1.7bn, or 106.6c per share, in the six months to December 2016. Headline earnings per share came in at 91.3c. This time around, its group disability business recorded underwriting profits about R60m lower than the previous period, while the loss of two health administration clients — Bankmed and Polmed — in the first half of last year saw operating earnings in this business line decline by R70m. MMI also suffered weak returns on its policyholder investment portfolio.