SA’s fifth-largest insurer, Momentum Metropolitan Holdings, reported an almost two-third jump in earnings for the year to end-June, but warned that SA’s weak economic environment posed a risk to its new focus on increasing its revenue.

Normalised headline earnings, the company’s main measure, were up 54% to R3.1bn to end-June, while diluted headline earnings per share (HEPS) jumped 61% to R202.5c, bolstered by a R2bn share buyback programme in November and solid underwriting results across the group.

Following the reinstatement of dividends in March 2019 after its share buyback programme, the group declared a total dividend of 70c per share.

The group’s investment income rose 10% to R22.1bn during the period, while pre-tax profit rose 22.8% to R5.5bn.

Momentum, which is in the middle of a growth and reset strategy aimed at creating a simplified operating model, said on Wednesday that its jump in HEPS was in the context of large negative operating basis changes and negative investment changes in the previous financial year.

Excluding the effect of these, operational performance improved 21% in the year to end-June, the company’s statement said.

The financial services company said on Wednesday that cost-reductions had their own limitations, and it would be relying more heavily on revenue growth in coming years. “This will be challenging in the current environment, and single-digit earnings growth for 2020 might be a fair result,” the company said.

“If the current pedestrian economic outlook persists, we are more likely to achieve the lower end of our target range of R3.6bn to R4bn by full-year 2021,” Momentum said.

In a separate statement on Wednesday, group CEO Hillie Meyer said: “The improvement in our earnings growth for the year to June 2019 is the result of financial discipline and a focus on our core activities; we have worked smarter with our money without negatively impacting our market presence.”