South Africa: MMI Improves Third-Quarter Underwriting Results

MMI, the insurance group created via the merger of Momentum and Metropolitan, managed to improve its underwriting results in the third quarter of its financial year.

MMI said in an operational update on Tuesday morning that the 5% slide in core earnings reported

in its interim results for the six months to end-December had been narrowed to 3% in the third quarter.

The group segments itself into four divisions — Momentum retail, Metropolitan retail, corporate and public sector, and international — all of which reported growth in recurring premiums but drops in single premiums business versus the matching period.

MMI’s overall recurring premium new business grew 8% while single premium new business fell 14%.

Its diluted embedded value per share was R26.25 on March 31, indicating at Monday’s closing price of R22.50 that the stock trades at a discount to its book value.

"Operating environment remains difficult in South Africa and we do not believe that the tough environment will improve meaningfully in the near term," MMI CEO Nicolaas Kruger said in the operating update. 

 "This means that we need to continue applying strong discipline in our capital allocation decisions and to find increasingly efficient ways of doing business in the absence of meaningful revenue growth in core operations. At this stage, we expect full-year results to broadly reflect the trends visible in the first nine months of the current financial year."