Momentum Metropolitan Holding's (MMH's) rebound from its Covid-19-induced lows in 2021 has seen its financial metrics surpass pre-pandemic levels on multiple fronts.
The Centurion-based insurer delivered R4.4 billion of normalised headline earnings in the year ending June, compared to just over R1 billion in the previous financial year, benefiting a little from the partial release of provisions put in place due to the pandemic.
But not only did these earnings shoot the lights out compared to the record lows the company reported in 2021, they also surpassed both the 2020 and 2019 financial years by billions of rands. MMH recorded R3 billion normalised headline earnings in the 2019 financial year, with this profit measure then halving in 2020.
The 2022 earnings also bring MMH closer to the goals set out in its new strategy, "Reinvent and Grow", which has moved the goalpost to R5 billion in normalised headline earnings by the end of June 2024.
In the 2021 financial year, MMH recorded a net mortality loss of R2.8 billion because of Covid-19 death claims. This time around, the Covid-19 impact on its earnings was less severe, resulting in the partial release of opening Covid-19 provisions the company had set aside, thus boosting the profits by R105 million.
As a result, the operating profits were also significantly ahead of 2021 at R3.4 billion compared to R73 million then. The company's return on equity also increased to 22.7% from 4.9% the previous year.
MMH CEO Hillie Meyer said the results also reflect the execution the group's strategic initiatives, which are not yet fully reflected in the results.
These strategic initiatives helped MMH grow its new business volumes by 10% to R72.7 billion.
Strong growth in Momentum Corporate, which provides group scheme benefits and employer-sponsored medical aid, and Metropolitan Life boosted the group's sales, but the Momentum brand is still struggling. Momentum Life's new business volumes declined year-on-year, and Momentum Investments' new business volumes slowed in the fourth quarter, even though the company ended up with 2% growth compared to the prior year.
"These strong results in year one of the three-year 'Reinvent and Grow' strategy are encouraging and confirm our solid competitive position," said Meyer.
"With these results, we are giving ourselves a sporting chance to deliver on the F2024 objectives set in our Reinvent and Grow strategy," he added.
MMH declared a total dividend of 100 cents per ordinary share, up 150% year-on-year.