Momentum Metropolitan reported yesterday in an operational update for the nine months ended March 31, 2023, that its earnings increased by 29% as a result of lower life insurance claims as a result of the declining impact of the Covid-19 pandemic.
despite the difficult economic environment, this.
For the reporting period, the listed life insurance and asset management company earned R3.4 billion in normalized headline earnings after announcing Jeanette Marais as Group CEO effective August 1 to succeed Hillie Meyer. Standardized title profit per share expanded from 169.6 pennies to 224.4c.
It stated that “the improved mortality experience in the life businesses, benefiting from the less severe impact of Covid-19, net of the release of Covid-19 reserves, in the current period supported this growth in earnings.”
The recovery in mortality experience variance in Momentum Life, Momentum Corporate, and Momentum Metropolitan Africa and good fee income growth in Momentum Metropolitan Health contributed to the 70% increase in operating profit to R2 951 million.
Energy Ventures’ standardized title profit diminished by 1% to R705m.
“This remembers a 12% downfall for working benefit, offset areas of strength for by in venture return coming about for the most part from cash interpretation gains and higher loan costs,” it said.
The normalized headline earnings of Metropolitan Life decreased by 2% to R389 million.
The group stated, “The current economic conditions are placing pressure on the customer base of this segment, and lapse experience is expected to remain under pressure.”
Standardized title profit in Force Corporate showed solid development of 42% in the earlier period to R877m, supported by a further improvement in guaranteeing brings about bunch risk items.
According to the statement, “this was aided by improved mortality claims experience, Covid-19 reserve releases, a continued improvement in disability experience, and higher interest earned on assets backing liabilities.”
Momentum Metropolitan Health’s contribution to normalized headline earnings, on the other hand, increased by 45 percent to R234 million during the preceding period.
This includes an increase in interest income, annual fee increases, and membership growth-related fee growth. “In spite of the difficult economic environment, the growth in the public sector and Health4Me membership is largely responsible for the overall membership growth of 3%,” it stated.
Momentum Insure, on the other hand, reported a loss of R145 million for the nine months, largely as a result of a high claim ratio of 78%, up from 69% in the previous period.
The group stated, “The impact of prolonged inflationary pressures on the cost of claims, increased frequency of incidents due to power surges (exacerbated by load shedding), higher frequency of motor accident and theft claim,” and “a lag in premium increases following the policy renewal cycle contributed to the higher-than-expected claim ratio.”
Momentum Metropolitan said that rising interest rates, high inflation, and load shedding would continue to impede economic activity in the future.
We are concerned about the pace of any possible economic recovery and how it will affect the amount of money that can be spent. This is probably going to put continuous reasonableness tension on new business volumes, especially on long haul reserve funds and on security business, where we have previously seen a decrease popular.
According to the report, “other factors, such as low confidence in SA asset classes and consumer preference to maintain assets in liquid low-risk investments” have a negative impact on the investment industry.