MMI reports better earnings thanks partly to life insurance

Financial services group MMI says earnings rose by almost a fifth in the nine months to end-March thanks in part to a “solid” performance from its life insurance operations.

Earnings were boosted by the Momentum Life business, the contribution from large corporate deals, improved group risk underwriting in Momentum Corporate, and “strong underwriting profits” in the non-life insurance unit.

But these gains were partly offset by lower-than-expected asset-based fee income in Momentum Investments, a decline in profitability at Metropolitan Retail, and an increase in MMI’s share of losses on new initiatives, it said.

“The plans to exit certain countries in Africa are progressing according to plan,” the group said.

MMI said diluted normalised headline earnings, its main earnings measure, rose 19% to R 2.4bn in the nine months to end-March.

“The third-quarter financial results for MMI reflect pleasing performance and good progress with the ‘reset and grow’ strategy that MMI announced in September 2018,” it said.

MMI said it was on track to produce normalised headline earnings of between R3.6bn and R4bn in 2021.

The group said the present value of new business premiums for the nine months to end-March was R40.6bn, an increase of 11%.

“MMI believes that its current emphasis on financial discipline and on improving client service is starting to have a positive impact,” it said.

The group said its focus would increasingly shift towards growth.

hedleyn@businesslive.co.za