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MMI Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2000/031756/06
JSE share code: MMI
NSX share code: MIM
ISIN: ZAE000149902
("MMI" or "the group")
MMI HOLDINGS SUMMARISED AND UNAUDITED GROUP RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
FINANCIAL HIGHLIGHTS
NEW BUSINESS PVP up 14% to R27 billion
VALUE OF NEW BUSINESS - R361 million
Annualised RETURN on EMBEDDED VALUE of 7%
Total EARNINGS up 14% to R1.5 billion
CORE HEADLINE EARNINGS down by 9% to R1.7 billion
Interim DIVIDEND up 3% to 65 cents per share
SUMMARY OF RESULTS
Group results
MMI Holdings Limited (MMI) announced its interim results for the six months to 31 December 2015, delivering a satisfactory performance in a tough environment.
- Diluted core headline earnings decreased 9% to R1.7 billion for the period, mainly as a result of unusually low underwriting profits across the group. MMI expects
underwriting profits to normalise over the medium term.
- Total earnings and headline earnings proved to be resilient, increasing by 14% and 5% respectively.
- Embedded value was maintained at R40 billion (2 505 cents per share), reflecting an annualised return on embedded value for shareholders of 7%.
- New business volumes increased 14% on the prior period, with strong growth from Corporate and International clients.
- The value of new business came in at R361 million, down 14% on the prior year. It should be noted, however, that it would have been 4% higher than the prior period had
the discount rate remained unchanged.
- The life insurance profits in both Momentum Retail and Metropolitan Retail delivered good growth compared to the prior period.
- In addition, overall profit growth was once again restricted by investments into strategic initiatives that are being pursued in line with the group strategy.
- An interim dividend of 65 cents per share was declared, an increase of 3% on the prior period. This dividend is within the dividend cover range of 1.5 to 1.7.
Operating environment
Local operating conditions remained challenging and highly competitive. The performance of the South African equity markets slowed dramatically during the reporting
period and ended slightly negative for the six-month period, while inflationary pressures and higher interest rates put further pressure on disposable income.
Capital management
- A strong capital buffer of R4 billion was reported as at 31 December 2015, after allowing for capital requirements, strategic growth initiatives and the interim dividend.
- Taking into account the growth focus, changing regulations including Solvency Assessment and Management and the difficult economic outlook, the group is satisfied that
its present capital level is appropriate.
Prospects
- The strategic focus areas of the MMI group are growth, client centricity and excellence.
- Each segment, together with the Product and Solutions Centres of Excellence and supporting functions, is advancing the implementation of MMI's client-centric strategy.
- Taking into account the economic outlook, the group has increased the focus on efficiencies while continuing to focus on quality top-line growth.
- As part of the implementation of the client-centric model, a number of areas have been identified where further efficiencies can be extracted. These savings have been
quantified and MMI is targeting a further reduction in annual expenses of R750m by financial year 2019.
- MMI is continuing to invest in growth initiatives with the aim of enhancing shareholder value over the longer term.
- Growth in new business volumes and profits will, however, be impacted by many factors in the South African economy, including employment levels and disposable income.
- The board of MMI Holdings believes that the group has identified and is implementing innovative strategies to continue unlocking value and generating the required return
on capital for shareholders over time.
SUMMARY OF FINANCIAL INFORMATION
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
DIRECTORS' STATEMENT
The directors take pleasure in presenting the unaudited condensed interim results of MMI Holdings financial services group for the period ended 31 December 2015. The
preparation of the group's results was supervised by the group finance director, Mary Vilakazi, CA(SA).
Corporate events
Listed debt
MMI Group Ltd (MMIGL) listed new instruments to the total value of R1 250 million on the JSE Ltd on 6 August 2015. The instruments are unsecured subordinated callable notes.
On 15 September 2015, R1 000 million of unsecured subordinated notes previously issued by MMIGL were redeemed.
Basis of preparation of financial information
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34) - Interim financial reporting;
the SAICA Financial Reporting Guide as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council; the
JSE Listings Requirements and the South African Companies Act, 71 of 2008. The accounting policies applied in the preparation of these financial statements are in terms of
International Financial Reporting Standards (IFRS) and are consistent with those adopted in the previous years except as described below. Critical judgements and accounting
estimates are disclosed in detail in the group's integrated report for the year ended 30 June 2015, including changes in estimates that are an integral part of the insurance
business. The group is exposed to financial and insurance risks, details of which are also provided in the group's integrated report.
New and revised standards effective for the period ended 31 December 2015 and relevant to the group
There were no new amendments to standards and interpretations in the current period.
Segmental report
From 1 July 2015 the MMI group embarked on a new segmental reporting view that is aligned with the client-centric goals of the group. The segmental report has been disclosed
on this new internal structure and the prior periods have been restated. The new segmental reporting had no impact on the current or prior year reported earnings, diluted
earnings or headline earnings per share, or on the net asset value or net cash flow.
The new client-centric reporting view reflects the following segments:
Momentum Retail: Momentum Retail's purpose is to enhance the lifetime financial wellness of people, their families, communities and businesses. The focus is on three main
client segments - the upper and middle retail segments and the small business segment in South Africa, offering innovative and appropriate wealth creation, risk and savings
solutions.
Metropolitan Retail: Metropolitan Retail's purpose is to enhance the lifetime financial wellness of people, their families and their communities through empowerment and
education. They target the entry-level market retail segments in South Africa with a focus on client value, ease of interaction, empowering advice and a lifetime engagement,
offering savings, income generation, risk and funeral products.
Corporate and Public Sector: In order to enhance the lifetime financial wellness of businesses, employees, customers and their communities, the client is placed at the centre
of everything the segment does. This requires deepening industry and sector insights about the institutions that MMI serves and focusing on the strategic issues that affect
them and their employees.
The Corporate and Public Sector focuses on medium to large corporates, affinity groups, labour unions and the public sector institutions, offering solutions that grow their
profitability, protect their asset base and enhance their sustainability.
International: The International segment manages MMI's global expansion holistically, in order to enhance the lifetime financial wellness of people, their communities and
their businesses and to take care of client needs in the selected segments of countries where MMI is represented.
Shareholder Capital: This segment is responsible for the management of the capital base of the group, and the incubation of strategic initiatives until such time as they start
to interact directly with clients, in which case they are then transferred to the relevant operating segment.
Embedded value restatements
On 1 July 2014 Guardrisk Life Ltd was transferred to covered business (adjusted net worth of R44 million and value of in-force of R324 million). The December 2014 comparatives
have been restated to reflect the transfer of Guardrisk Life Ltd to covered business.
Corporate governance
The board has satisfied itself that appropriate principles of corporate governance were applied throughout the period under review.
Changes to the directorate, secretary and directors' shareholding
Sizwe Nxasana retired from the MMI board on 30 September 2015 and Leon Crouse resigned from the MMI board with effect from 31 March 2016. We thank them for their commitment
and contribution to the group. On 20 November 2015, Peter Cooper, currently a non-executive director of RMH, RMI, RMB Structured Insurance, amongst others was appointed to the
board.
All transactions in listed shares of the company involving directors were disclosed on SENS.
Changes to the group executive committee
There were no changes in the current period.
Contingent liabilities and capital commitments
As part of running a business, the group is party to legal proceedings and appropriate provisions are made when losses are expected to materialise. The group had no material
capital commitments at 31 December 2015 that were not in the ordinary course of business.
Events after the reporting period
No material events occurred between the reporting date and the date of approval of these results.
Interim dividend declaration
Ordinary shares
- On 2 March 2016, a gross interim dividend of 65 cents per ordinary share was declared.
- The dividend is payable out of income reserves to all holders of ordinary shares recorded in the register of the company at the close of business on Friday, 1 April 2016, and
will be paid on Monday, 4 April 2016.
- The dividend will be subject to local dividend withholding tax at a rate of 15% unless the shareholder is exempt from paying dividend tax or is entitled to a reduced rate.
- This will result in a net final dividend of 55.25 cents per ordinary share for those shareholders who are not exempt from paying dividend tax.
- The last day to trade cum dividend will be Wednesday, 23 March 2016.
- The shares will trade ex dividend from the start of business on Thursday, 24 March 2016.
- Share certificates may not be dematerialised or rematerialised between Thursday, 24 March 2016 and Friday, 1 April 2016, both days inclusive.
- The number of ordinary shares at the declaration date was 1 572 943 126.
- MMI's income tax number is 975 2050 147.
Preference shares
- Dividends of R20.7 million (132 cents per share p.a.) were declared on the unlisted A3 MMI Holdings Ltd preference shares as determined by the company's Memorandum of
Incorporation.
Directors' responsibility
These results are the responsibility of the directors. The condensed interim results have not been reviewed or audited by the external auditors. This announcement does not
include the information required by paragraph 16A(j) of IAS 34. The full condensed IAS 34 compliant results are available on MMI's website and at MMI's registered offices upon
request. A printed version of the SENS announcement may be requested from the group company secretary, Maliga Chetty tel: 012 684 4255.
Signed on behalf of the board
JJ Njeke Chairman
Nicolaas Kruger Group chief executive officer
Centurion
2 March 2016
DIRECTORS:
MJN Njeke (chairman), JP Burger (deputy chairman), NAS Kruger (group chief executive officer), M Vilakazi (group finance director), P Cooper, L Crouse, F Jakoet,
Prof JD Krige, PJ Moleketi, SA Muller, V Nkonyeni, KC Shubane, FJC Truter, BJ van der Ross, JC van Reenen, LL von Zeuner
GROUP COMPANY SECRETARY: Maliga Chetty
WEBSITE: www.mmiholdings.com
TRANSFER SECRETARIES: Link Market Services SA (Pty) Ltd (registration number 2000/007239/07)
Rennie House, 13th Floor, 19 Ameshoff Street, Braamfontein 2001. PO Box 4844, Johannesburg 2000
Telephone: +27 11 713 0800
E-mail: info@linkmarketservices.co.za
SPONSOR: Merrill Lynch (registration number: 2000/031756/06)
AUDITORS: PricewaterhouseCoopers Inc
REGISTERED OFFICE: 268 West Avenue, Centurion 0157
JSE CODE: MMI NSX CODE: MIM ISIN NO: ZAE000149902
SENS ISSUE: 3 March 2016
MMI HOLDINGS GROUP - IFRS FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
ASSETS
Intangible assets 12 813 13 280 13 153
Owner-occupied properties 3 084 1 805 3 030
Property and equipment 463 353 353
Investment properties 7 595 8 180 7 212
Investments in associates 212 194 145
Employee benefit assets 417 412 408
Financial instruments (1) 387 538 370 089 388 258
Reinsurance contract assets 3 272 3 057 3 046
Deferred income tax 296 268 287
Properties under development 225 301 330
Insurance and other receivables 5 157 4 253 4 080
Current income tax assets 352 466 365
Cash and cash equivalents 31 849 26 009 26 174
Total assets 453 273 428 667 446 841
EQUITY
Equity attributable to owners of the parent 24 838 24 023 24 547
Non-controlling interests 395 526 501
Total equity 25 233 24 549 25 048
LIABILITIES
Insurance contract liabilities
Long-term insurance contracts 103 771 105 385 104 776
Short-term insurance contracts 6 914 6 244 6 553
Financial instruments
Investment contracts 253 107 236 079 246 490
- with discretionary participation features 25 650 26 292 26 134
- designated at fair value through income 227 457 209 787 220 356
Other financial instruments (2) 45 181 38 660 42 923
Reinsurance contract liabilities 910 645 659
Deferred income tax 4 201 4 300 4 351
Employee benefit obligations 1 081 1 228 1 735
Other payables 12 668 11 216 14 062
Provisions 25 26 78
Current income tax liabilities 182 335 166
Total liabilities 428 040 404 118 421 793
Total equity and liabilities 453 273 428 667 446 841
1. Financial instruments consist of the following:
- Securities designated at fair value through income: R365 881 million (31.12.2014: R347 229 million; 30.06.2015: R365 727 million)
- Investments in associates designated at fair value through income: R12 168 million (31.12.2014: R15 009 million; 30.06.2015: R12 362 million)
- Derivative financial instruments: R2 537 million (31.12.2014: R2 029 million; 30.06.2015: R2 033 million)
- Available-for-sale: R142 million (31.12.2014: R131 million; 30.06.2015: R208 million)
- Held-to-maturity: R129 million (31.12.2014: R88 million; 30.06.2015: R73 million)
- Loans and receivables: R6 681 million (31.12.2014: R5 603 million; 30.06.2015: R7 855 million)
2. Other financial instruments consist of the following:
- Designated at fair value through income: R40 391 million (31.12.2014: R35 421 million; 30.06.2015: R39 720 million)
- Derivative financial instruments: R3 807 million (31.12.2014: R 2 202 million; 30.06.2015: R2 111 million)
- Amortised cost: R983 million (31.12.2014: R1 037 million; 30.06.2015: R1 092 million)
CONDENSED CONSOLIDATED INCOME STATEMENT
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Net insurance premiums 14 144 13 943 27 396
Fee income (1) 3 790 3 768 7 355
Investment income 8 350 7 980 15 559
Net realised and fair value gains 6 417 5 853 16 248
Net income 32 701 31 544 66 558
Net insurance benefits and claims 13 046 11 905 24 610
Change in liabilities (2 395) 98 (869)
Change in long-term insurance contract liabilities (1 977) (1 181) (2 069)
Change in short-term insurance contract liabilities (100) 158 (139)
Change in investment contracts with DPF liabilities (488) 842 728
Change in reinsurance assets (81) (163) 154
Change in reinsurance liabilities 251 442 457
Fair value adjustments on investment contract liabilities 8 486 6 158 16 039
Fair value adjustments on collective investment scheme liabilities 1 274 1 315 2 457
Depreciation, amortisation and impairment expenses 664 633 1 326
Employee benefit expenses 2 549 3 086 5 922
Sales remuneration 2 707 2 623 5 071
Other expenses 3 183 2 980 5 806
Expenses 29 514 28 798 60 362
Results of operations 3 187 2 746 6 196
Share of profit of associates 5 5 4
Finance costs (2) (468) (374) (792)
Profit before tax 2 724 2 377 5 408
Income tax expense (1 167) (971) (2 431)
Earnings for the period 1 557 1 406 2 977
Attributable to:
Owners of the parent 1 537 1 353 2 857
Non-controlling interests 20 53 120
1 557 1 406 2 977
Basic earnings per ordinary share (cents) 98.7 87.0 183.5
Diluted earnings per ordinary share (cents) 97.2 85.5 180.5
1. Fee income consists of the following:
- Investment contracts: R1 078 million (31.12.2014: R1 229 million; 30.06.2015: R2 225 million)
- Trust and fiduciary services: R988 million (31.12.2014: R865 million; 30.06.2015: R1 842 million)
- Health administration: R1 107 million (31.12.2014: R1 075 million; 30.06.2015: R2 053 million)
- Other fee income: R617 million (31.12.2014: R599 million; 30.06.2015: R1 235 million)
2. Finance costs consist of the following:
- Preference shares issued by MMI: R54 million (31.12.2014: R55 million; 30.06.2015: R108 million)
- Subordinated debt: R169 million (31.12.2014: R133 million; 30.06.2015: R271 million)
- Cost of carry positions: R175 million (31.12.2014: R109 million; 30.06.2015: R261 million)
- Other: R70 million (31.12.2014: R77 million; 30.06.2015: R152 million)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Earnings for the period 1 557 1 406 2 977
Other comprehensive income, net of tax 360 57 68
Items that may subsequently be reclassified to income 323 3 6
Exchange differences on translating foreign operations 320 3 1
Available-for-sale financial assets 3 - 5
Items that will not be reclassified to income 37 54 62
Land and building revaluation 58 68 118
Change in non-distributable reserves - 2 -
Adjustments to employee benefit funds (13) 1 (20)
Income tax relating to items that will not be reclassified (8) (17) (36)
Total comprehensive income for the period 1 917 1 463 3 045
Total comprehensive income attributable to:
Owners of the parent 1 898 1 410 2 926
Non-controlling interests 19 53 119
1 917 1 463 3 045
RECONCILIATION OF HEADLINE EARNINGS
attributable to owners of the parent
Basic earnings Diluted earnings
6 mths to 6 mths to 12 mths to 6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015 31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm Rm Rm Rm
Earnings 1 537 1 353 2 857 1 537 1 353 2 857
Finance costs - convertible preference shares 21 23 44
Dilutory effect of subsidiaries (1) (14) (16) (31)
Diluted earnings 1 544 1 360 2 870
Intangible asset and other impairments - 3 19 - 3 19
Tax on intangible asset and other impairments - - (4) - - (4)
Gain on sale of subsidiary (115) - - (115) - -
Headline earnings (2) 1 422 1 356 2 872 1 429 1 363 2 885
Net realised and fair value gains on excess (265) 73 6 (265) 73 6
Basis and other changes and investment variances 68 25 148 68 25 148
Amortisation of intangible assets relating to business combinations 373 330 720 373 330 720
Non-recurring items (3) 61 43 53 61 43 53
Investment income on treasury shares - contract holders 13 18 24
Core headline earnings (4) 1 659 1 827 3 799 1 679 1 852 3 836
1. Metropolitan Health is consolidated at 100% and the MMI Holdings Namibian group, Metropolitan Kenya and Cannon are consolidated at 96% in the results. For purposes of diluted
earnings, diluted non-controlling interests and investment returns are reinstated.
2. Headline earnings consist of operating profit, investment income, net realised and fair value gains, investment variances and basis and other changes.
3. Non-recurring items include one-off costs relating mainly to the restructuring of the group.
4. Core headline earnings disclosed comprise operating profit and investment income on shareholder assets. It excludes net realised and fair value gains on financial assets and
liabilities, investment variances and basis and other changes that can be volatile, certain non-recurring items, as well as the amortisation of intangible assets relating to
business combinations as this is part of the cost of acquiring the business.
EARNINGS PER SHARE (cents)
attributable to owners of the parent
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Basic
Core headline earnings 106.6 117.4 244.0
Headline earnings 91.3 87.1 184.5
Earnings 98.7 87.0 183.5
Weighted average number of shares (million) 1 557 1 556 1 557
Diluted
Core headline earnings 104.7 115.5 239.2
Weighted average number of shares (million) (1) 1 604 1 604 1 604
Headline earnings 90.0 85.7 181.4
Earnings 97.2 85.5 180.5
Weighted average number of shares (million) (2) 1 588 1 590 1 590
1. For diluted core headline earnings per share, treasury shares held on behalf of contract holders are deemed to be issued.
2. For diluted earnings and headline earnings per share, treasury shares held on behalf of contract holders are deemed to be cancelled.
DIVIDENDS 2016 2015
Ordinary listed MMI Holdings Ltd shares (cents per share)
Interim - March 65 63
Final - September 92
Total 155
MMI Holdings Ltd convertible redeemable preference shares (issued to Kagiso Tiso Holdings (Pty) Ltd (KTH))
The A3 MMI Holdings Ltd preference shares are redeemable in June 2017 at a redemption value of R9.18 per share unless converted into MMI Holdings Ltd ordinary shares on a
one-for-one basis prior to that date. On 1 October 2015, 1 million preference shares were converted into ordinary shares. On each of 13 November 2014 and 31 March 2015,
1.1 million preference shares were converted into ordinary shares. The ordinary shares were originally issued at a price of R10.18 per share. Dividends are payable on the
remaining preference shares at 132 cents per annum (payable March and September).
Significant related party transactions
R362 million of the ordinary dividends declared by MMI Holdings Ltd in September 2015 (R333 million of the ordinary dividends declared in September 2014) and R248 million of
the ordinary dividends declared in March 2015 were attributable to RMI Holdings Ltd.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Changes in share capital
Balance at beginning and end 9 9 9
Changes in share premium
Balance at beginning 13 795 13 782 13 782
Conversion of preference shares 9 10 20
Increase in treasury shares held on behalf of contract holders (87) (2) (7)
Balance at end 13 717 13 790 13 795
Changes in other reserves
Balance at beginning 1 866 1 802 1 802
Total comprehensive income 361 57 69
BEE cost 2 2 4
Change in non-distributable reserves (2) - -
Transfer to retained earnings (3) (9) (9)
Balance at end (1) 2 224 1 852 1 866
Changes in retained earnings
Balance at beginning 8 877 9 141 9 141
Total comprehensive income 1 537 1 353 2 857
Dividend paid (1 453) (2 110) (3 094)
Transactions with non-controlling interests (76) - (15)
Transfer from other reserves 3 9 9
Puttable non-controlling interests (2) - (21) (21)
Balance at end 8 888 8 372 8 877
Equity attributable to owners of the parent 24 838 24 023 24 547
Changes in non-controlling interests
Balance at beginning 501 480 480
Total comprehensive income 19 53 119
Dividend paid (33) (16) (23)
Transactions with owners (2) (92) (92) (170)
Business combinations - 101 95
Balance at end 395 526 501
Total equity 25 233 24 549 25 048
1. Other reserves consist of the following:
- Land and building revaluation reserve: R679 million (31.12.2014: R606 million; 30.06.2015: R631 million)
- Foreign currency translation reserve: R493 million (31.12.2014: R180 million; 30.06.2015: R181 million)
- Revaluation of available-for-sale investments: R10 million (31.12.2014: R3 million; 30.06.2015: R8 million)
- Non-distributable reserve: R21 million (31.12.2014: R18 million; 30.06.2015: R19 million)
- Employee benefit revaluation reserve: R70 million (31.12.2014: R99 million; 30.06.2015: R78 million)
- Fair value adjustment for preference shares issued by MMI Holdings Ltd: R940 million (31.12.2014: R940 million; 30.06.2015: R940 million)
- Equity-settled share-based payment arrangements: R11 million (31.12.2014: R6 million; 30.06.2015: R9 million)
2. Non-controlling interests of 25% of Metropolitan Life Kenya and Cannon have the option to sell their shares from 3 October 2016 at a price linked to embedded value. In terms
of IFRS, the group has recognised a financial liability of R104 million (31.12.2014: R114 million; 30.06.2015: R111 million), being the present value of the estimated purchase
price, for exercising this option. The group has consolidated 96% of the subsidiaries' results and in June 2015 de-recognised the non-controlling interest (R90 million) due to
the financial liability recognised above, which is in line with its selected accounting policy.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Net cash inflow/(outflow) from operating activities 7 503 (53) 1 505
Net cash outflow from investing activities (342) (961) (1 271)
Net cash outflow from financing activities (1 486) (1 852) (2 935)
Net cash flow 5 675 (2 866) (2 701)
Cash resources and funds on deposit at beginning 26 174 28 875 28 875
Cash resources and funds on deposit at end 31 849 26 009 26 174
PRINCIPAL ASSUMPTIONS (South Africa) (1)
31.12.2015 31.12.2014 30.06.2015
% % %
Pre-tax investment return
Equities 13.6 11.7 12.1
Properties 11.1 9.2 9.6
Government stock 10.1 8.2 8.6
Other fixed-interest stocks 10.6 8.7 9.1
Cash 9.1 7.2 7.6
Risk-free return (2) 10.1 8.2 8.6
Risk discount rate (RDR) 12.3 10.5 10.9
Investment return (before tax) - balanced portfolio (2) 12.2 10.4 10.8
Expense inflation base rate (3) 8.3 6.4 6.8
1. The principal assumptions relate only to the South African life insurance business. Assumptions relating to international life insurance businesses are based on local
requirements and can differ from the South African assumptions.
2. The risk-free return was determined with reference to the market interest rate on South African government bonds at the valuation date. The investment return on balanced
portfolio business was calculated by applying the above returns to an expected long-term asset distribution.
3. An additional 1% expense inflation is allowed for in some divisions to reflect the impact of closed books that are in run-off.
NON-CONTROLLING INTERESTS
31.12.2015 31.12.2014 30.06.2015
% % %
Cannon Assurance 33.7 33.7 33.7
Eris Property Group 23.7 45.7 45.7
Metropolitan Botswana - 24.2 -
Metropolitan Health Botswana 28.0 28.0 28.0
Metropolitan Health Ghana 0.9 1.8 1.8
Metropolitan Health Group 17.6 17.6 17.6
Metropolitan Health Mauritius - 5.0 5.0
Metropolitan Health Namibia Administrators 49.0 49.0 49.0
Metropolitan Kenya 33.7 33.7 33.7
Metropolitan Life Mauritius - 30.0 30.0
Metropolitan Nigeria 50.0 50.0 50.0
Metropolitan Swaziland 33.0 33.0 33.0
Metropolitan Tanzania 33.0 33.0 33.0
Metropolitan Health Zambia 35.0 35.0 35.0
MMI Holdings Namibia 10.3 10.3 10.3
Momentum Mozambique 33.0 33.0 33.0
Momentum Swaziland 33.0 33.0 33.0
BUSINESS COMBINATIONS - DECEMBER 2015
There were no significant business combinations for the 6 months ended December 2015.
BUSINESS COMBINATIONS - JUNE 2015
Cannon
On 2 October 2014, the group acquired an accounting ownership of 71% (legal ownership of 66%) of Cannon, a composite insurer, for R308 million. The minority shareholders of
Cannon also acquired a minority stake in Metropolitan Life Kenya. This acquisition allowed for geographical as well as product diversification within the group's international
operations. The purchase price allocation has been finalised and the transaction resulted in R103 million goodwill being recognised attributable to certain anticipated
operating synergies.
CareCross
On 19 November 2014, the group acquired 100% in CareCross, a health administrator, for R300 million in cash. It includes a majority share in Occupational Care South Africa
(OCSA). This acquisition allowed for revenue diversification in the Metropolitan Health segment. The transaction did not result in any goodwill being recognised.
Other
During the year the group also made a few smaller acquisitions.
The purchase price consideration, the net assets acquired and any relevant goodwill relating to the above two transactions are as follows:
June 2015 Total Cannon CareCross
Rm Rm Rm
Purchase consideration in total 608 308 300
Fair value of net assets
Intangible assets 566 174 392
Tangible assets 145 138 7
Financial instrument assets 241 228 13
Reinsurance contract assets 6 6 -
Insurance and other receivables 36 36 -
Other assets 39 19 20
Cash and cash equivalents 79 16 63
Insurance contract liabilities (195) (177) (18)
Financial instrument liabilities (38) (38) -
Other liabilities (268) (98) (170)
Net identifiable assets acquired 611 304 307
Non-controlling interests (fair value method) (95) (88) (7)
Goodwill recognised 103 103 -
Derecognition of Metropolitan Life Kenya shares (11) (11) -
Purchase consideration in cash 608 308 300
The goodwill relating to the above transactions is not deductible for tax purposes. The above transactions contributed net income of R437 million and earnings of R43 million
to the group results for the year.
RECONCILIATION OF GOODWILL
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Balance at beginning 1 333 1 088 1 088
Business combinations - 158 234
Exchange differences 35 - 11
Balance at end 1 368 1 246 1 333
MMI HOLDINGS GROUP - SEGMENTAL INFORMATION
6 mths to 31.12.2015 Momentum Retail Metropolitan Retail Corporate and Public Sector International Shareholder Capital Segmental total Reconciling items (1) IFRS total
Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
Net insurance premiums 12 720 3 645 13 661 2 025 - 32 051 (17 907) 14 144
Recurring premiums 4 575 2 991 7 494 1 774 - 16 834 (4 237) 12 597
Single premiums 8 145 654 6 167 251 - 15 217 (13 670) 1 547
Fee income 1 708 34 2 111 171 289 4 313 (523) 3 790
Fee income 1 468 34 1 898 127 235 3 762 28 3 790
Intergroup fee income 240 - 213 44 54 551 (551) -
Expenses
Net payments to contract holders
External payments 12 540 3 232 15 339 1 208 - 32 319 (19 273) 13 046
Other expenses 2 803 1 065 2 614 867 378 7 727 1 376 9 103
Sales remuneration 1 119 514 732 334 11 2 710 (3) 2 707
Administration expenses (2) 1 276 527 1 037 395 161 3 396 498 3 894
Amortisation due to business
combinations and impairments - - 6 - 45 51 453 504
Cell captive business - - 609 - - 609 - 609
Direct property expenses - - - - - - 211 211
Asset management and other
fee expenses 80 - 106 5 193 384 768 1 152
Holding company expenses - - - - 26 26 - 26
Intergroup expenses 328 24 124 133 (58) 551 (551) -
Diluted core headline earnings 705 311 379 31 253 1 679 - 1 679
Operating profit 981 439 487 37 (32) 1 912 - 1 912
Tax on operating profit (305) (128) (142) (15) (31) (621) - (621)
Investment income 35 - 50 12 375 472 - 472
Tax on investment income (6) - (16) (3) (59) (84) - (84)
Covered 748 311 198 109 251 1 617 - 1 617
Non-covered (43) - 181 (78) 2 62 - 62
705 311 379 31 253 1 679 - 1 679
Actuarial liabilities 190 805 32 296 126 804 10 941 2 946 363 792 - 363 792
1. The 'Reconciling items' column includes: investment contract business; intergroup fees and expenses; grossing up of fee income and expenses relating to the Shareholder Capital
segment that are set off for management reporting purposes; non-recurring items; direct property and asset management fees for all segments, except non-life segments, that are
set off against investment income for management reporting purposes but shown as an expense for accounting purposes; the amortisation of intangibles relating to business
combinations; expenses relating to consolidated collective investment schemes and other minor adjustments to expenses and fee income.
2. Momentum Retail administration expenses includes R58 million relating to Momentum SP Reid.
Restated
6 mths to 31.12.2014 Momentum Retail Metropolitan Retail Corporate and Public Sector International Shareholder Capital Segmental total Reconciling items (1) IFRS total
Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
Net insurance premiums 11 895 3 456 15 774 1 726 - 32 851 (18 908) 13 943
Recurring premiums 4 353 2 865 6 927 1 488 - 15 633 (4 067) 11 566
Single premiums 7 542 591 8 847 238 - 17 218 (14 841) 2 377
Fee income 1 874 59 1 987 172 381 4 473 (705) 3 768
Fee income 1 623 59 1 807 120 174 3 783 (15) 3 768
Intergroup fee income 251 - 180 52 207 690 (690) -
Expenses
Net payments to contract holders
External payments 12 221 2 408 12 910 973 - 28 512 (16 607) 11 905
Other expenses 2 779 1 121 2 703 783 549 7 935 1 387 9 322
Sales remuneration 1 126 508 709 276 8 2 627 (4) 2 623
Administration expenses 1 190 592 1 170 408 361 3 721 931 4 652
Amortisation due to business
combinations and impairments - - 7 - 20 27 440 467
Cell captive business - - 498 - - 498 - 498
Direct property expenses - - - - - - 65 65
Asset management and other
fee expenses 67 - 97 - 168 332 645 977
Holding company expenses - - - - 40 40 - 40
Intergroup expenses 396 21 222 99 (48) 690 (690) -
Diluted core headline earnings 745 273 377 62 395 1 852 - 1 852
Operating profit 1 016 394 509 71 (39) 1 951 - 1 951
Tax on operating profit (290) (121) (147) (20) 68 (510) - (510)
Investment income 25 - 24 11 460 520 - 520
Tax on investment income (6) - (9) - (94) (109) - (109)
Covered 714 273 211 128 406 1 732 - 1 732
Non-covered 31 - 166 (66) (11) 120 - 120
745 273 377 62 395 1 852 - 1 852
Actuarial liabilities 180 649 32 304 122 201 9 694 2 860 347 708 - 347 708
1. The 'Reconciling items' column includes: investment contract business; intergroup fees and expenses; grossing up of fee income and expenses relating to the Shareholder Capital
segment that are set off for management reporting purposes; non-recurring items; direct property and asset management fees for all segments, except non-life segments, that are
set off against investment income for management reporting purposes but shown as an expense for accounting purposes; the amortisation of intangibles relating to business
combinations; expenses relating to consolidated collective investment schemes and other minor adjustments to expenses and fee income.
Restated
12 mths to 30.06.2015 Momentum Retail Metropolitan Retail Corporate and Public Sector International Shareholder Capital Segmental total Reconciling items (1) IFRS total
Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
Net insurance premiums 24 676 6 910 29 921 3 563 - 65 070 (37 674) 27 396
Recurring premiums 8 992 5 495 14 345 3 215 - 32 047 (8 282) 23 765
Single premiums 15 684 1 415 15 576 348 - 33 023 (29 392) 3 631
Fee income 3 452 95 4 068 362 761 8 738 (1 383) 7 355
Fee income 2 962 95 3 644 257 403 7 361 (6) 7 355
Intergroup fee income 490 - 424 105 358 1 377 (1 377) -
Expenses
Net payments to contract holders
External payments 24 088 4 967 27 500 1 953 - 58 508 (33 898) 24 610
Other expenses 5 453 2 070 5 267 1 586 1 229 15 605 2 520 18 125
Sales remuneration 2 200 893 1 426 544 15 5 078 (7) 5 071
Administration expenses (2) 2 286 1 135 1 956 837 957 7 171 1 535 8 706
Amortisation due to business 17 - 12 - 81 110 891 1 001
combinations and impairments
Cell captive business - - 1 197 - - 1 197 - 1 197
Direct property expenses - - - - - - 105 105
Asset management and other 129 - 201 7 268 605 1 373 1 978
fee expenses
Holding company expenses - - - - 67 67 - 67
Intergroup expenses 821 42 475 198 (159) 1 377 (1 377) -
Diluted core headline earnings 1 756 604 861 152 463 3 836 - 3 836
Operating profit 2 423 876 1 170 179 (186) 4 462 - 4 462
Tax on operating profit (697) (272) (344) (33) 53 (1 293) - (1 293)
Investment income 42 - 48 6 775 871 - 871
Tax on investment income (12) - (13) - (179) (204) - (204)
Covered 1 725 604 487 266 550 3 632 - 3 632
Non-covered 31 - 374 (114) (87) 204 - 204
1 756 604 861 152 463 3 836 - 3 836
Actuarial liabilities 186 493 32 937 125 177 10 095 3 117 357 819 - 357 819
1. The 'Reconciling items' column includes: investment contract business; intergroup fees and expenses; grossing up of fee income and expenses relating to the Shareholder Capital
segment that are set off for management reporting purposes; non-recurring items; direct property and asset management fees for all segments, except non-life segments, that are
set off against investment income for management reporting purposes but shown as an expense for accounting purposes; the amortisation of intangibles relating to business
combinations; expenses relating to consolidated collective investment schemes and other minor adjustments to expenses and fee income.
2. Administration expenses for the 2015 year include the following relating to new acquisitions: International - R54 million relating to Cannon; Corporate and Public Sector -
R258 million relating to CareCross.
CHANGE IN DILUTED CORE HEADLINE EARNINGS
Restated Restated
6 mths to 6 mths to 12 mths to
Change 31.12.2015 31.12.2014 30.06.2015
% Rm Rm Rm
Momentum Retail (5) 705 745 1 756
Metropolitan Retail 14 311 273 604
Corporate and Public Sector 1 379 377 861
International (50) 31 62 152
Operating segments (2) 1 426 1 457 3 373
Shareholder Capital (36) 253 395 463
Total diluted core headline earnings (9) 1 679 1 852 3 836
RECONCILIATION OF INVESTMENTS
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Revenue 659 692 1 429
Fee income 380 394 797
Intergroup fees 270 277 574
Investment income 13 12 26
Fair value (losses)/gains (4) 9 32
Expenses and finance costs (602) (577) (1 259)
Other expenses (595) (573) (1 253)
Finance costs (7) (4) (6)
Profit before tax 57 115 170
Tax (20) (30) (61)
Earnings attributable to ordinary shareholders 37 85 109
Core adjustments 32 (7) 31
Goodwill and other impairments - - 12
Net realised and fair value losses/(gains) on excess 4 (7) (22)
Amortisation of intangible assets relating to business combinations - - 41
Non-recurring items 28 - -
Diluted core headline earnings 69 78 140
Operating profit before tax 94 98 182
Tax on operating profit (28) (25) (56)
Investment income 6 8 20
Tax on investment income (3) (3) (6)
Diluted core headline earnings 69 78 140
Allocated per segment:
Momentum Retail 52 70 120
Corporate and Public Sector 27 8 28
Shareholder Capital (10) - (8)
69 78 140
RECONCILIATION OF HEALTH
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Revenue 1 306 1 208 2 593
Net insurance premiums 319 234 623
Fee income 972 954 1 930
Intergroup fees 1 6 11
Investment income 14 14 29
Expenses (1 180) (1 058) (2 260)
Net payments to contract holders (238) (175) (485)
Other expenses (942) (883) (1 775)
Profit before tax 126 150 333
Tax (42) (43) (92)
Non-controlling interests - (1) (3)
Earnings attributable to ordinary shareholders 84 106 238
Core adjustments 14 (5) (11)
Dilutory effect of subsidiaries (8) (11) (23)
Amortisation of intangible assets relating to business combinations 6 6 12
Non-recurring items 16 - -
Diluted core headline earnings 98 101 227
Operating profit before tax 131 127 283
Tax on operating profit (42) (36) (80)
Investment income 15 17 35
Tax on investment income (6) (7) (11)
Diluted core headline earnings 98 101 227
Allocated per segment:
Momentum Retail 5 3 18
Corporate and Public Sector 93 98 209
98 101 227
RECONCILIATION OF GUARDRISK (PROMOTER CELL (1))
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Revenue by type 240 244 495
Management fees 204 182 353
Investment fees 30 28 51
Underwriting (loss)/profit (26) 10 23
Other income 1 1 3
Investment income 31 23 65
Expenses and finance costs (158) (142) (273)
Administration expenses (152) (137) (263)
Finance costs (6) (5) (10)
Operating profit before tax 82 102 222
Tax attributable to promoter operating profit (18) (29) (62)
Diluted core headline earnings 64 73 160
Covered 16 14 33
Non-covered 48 59 127
Corporate and Public Sector segment 64 73 160
1. An insurer that enters into contractual arrangements with cell shareholders whereby the risks and rewards associated with certain insurance activities accruing
to the cell shareholder, in relation to the insurer, is specified. The promoter cell will exclude all assets and liabilities and related income and expenses of
the cell arrangements.
RECONCILIATION OF SHORT-TERM INSURANCE
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Revenue 306 241 537
Net insurance premiums 286 227 506
Fee income 8 6 15
Investment income 12 8 16
Expenses (401) (292) (719)
Net payments to contract holders (245) (160) (441)
Other expenses (156) (132) (278)
Loss before tax (95) (51) (182)
Tax 14 15 51
Earnings attributable to ordinary shareholders (81) (36) (131)
Operating loss before tax (107) (59) (198)
Tax on operating loss 17 17 56
Investment income 12 8 16
Tax on investment income (3) (2) (5)
Diluted core headline earnings - Momentum Retail segment (81) (36) (131)
ANALYSIS OF SHAREHOLDER CAPITAL
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Holding company costs (23) (60) (90)
Balance sheet management 4 69 34
International (11) (11) (49)
Momentum short-term insurance administration (20) (23) (35)
Eris Property Group 16 19 41
Other (29) 42 (34)
Finance costs (251) (207) (433)
Investment income 627 665 1 208
Tax on investment income (60) (99) (179)
Total 253 395 463
NET PAYMENTS TO CONTRACT HOLDERS
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Momentum Retail 12 540 12 221 24 088
Death and disability claims 2 262 1 876 3 694
Maturity claims 3 307 3 778 7 547
Annuities 2 438 2 369 4 692
Withdrawal benefits 154 21 80
Surrenders 4 744 4 566 8 523
Short-term insurance 245 158 440
Health claims 65 25 116
Re-insurance recoveries (675) (572) (1 004)
Metropolitan Retail 3 232 2 408 4 967
Death and disability claims 584 555 1 093
Maturity claims 1 505 783 1 668
Annuities 332 301 620
Withdrawal benefits - 46 84
Surrenders 845 753 1 560
Re-insurance recoveries (34) (30) (58)
Corporate and Public Sector 15 339 12 910 27 500
Death and disability claims 3 305 2 430 5 084
Maturity claims 540 430 948
Annuities 887 779 1 625
Withdrawal benefits 1 165 1 629 3 796
Terminations and disinvestments 9 380 7 133 14 613
Short-term insurance 2 296 2 172 4 745
Health claims 174 125 185
Re-insurance recoveries (2 408) (1 788) (3 496)
International 1 208 973 1 953
Death and disability claims 222 216 420
Maturity claims 233 194 371
Annuities 46 49 99
Withdrawal benefits 74 59 108
Surrenders 282 220 498
Terminations 34 71 90
Short-term insurance 96 51 104
Health claims 254 183 393
Re-insurance recoveries (33) (70) (130)
Total payments to contract holders 32 319 28 512 58 508
Reconciling items (1) (19 273) (16 607) (33 898)
Net insurance benefits and claims per income statement 13 046 11 905 24 610
1. Relates mainly to payments to investment contract holders.
MMI HOLDINGS GROUP - STATUTORY EXCESS
STATUTORY EXCESS
Restated
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Group excess per reporting basis 24 838 24 023 24 547
Net assets - other businesses (3 413) (3 464) (3 256)
Fair value adjustments on Metropolitan business acquisition and other consolidation adjustments (3 618) (4 070) (3 826)
Excess - long-term insurance business, net of non-controlling interests (1) 17 807 16 489 17 465
Disregarded assets (2) (996) (991) (1 010)
Difference between statutory and published valuation methods (846) (615) (839)
Write-down of subsidiaries and associates for statutory purposes (1 352) (1 132) (1 210)
Unsecured subordinated debt 3 459 3 339 3 320
Consolidation adjustments (39) 63 141
Statutory excess - long-term insurance business 18 033 17 153 17 867
Capital adequacy requirement (CAR) (Rm) (3) 6 456 6 418 6 639
Ratio of long-term insurance business excess to CAR (times) 2.8 2.7 2.7
Discretionary margins 12 759 13 661 13 620
1. The long-term insurance business includes both insurance and investment contract business and is the simple aggregate of all the life insurance companies in the group,
including life insurance companies in Africa; in respect of Guardrisk only MMI's promoter exposure to the South African long-term insurance business, Guardrisk Life Ltd. It
excludes the short-term insurance businesses of Guardrisk, Momentum Short-term Insurance and Cannon (Kenya) due to it being classified as non-covered, as well as the other
non-life insurance entities, including African health operations. Guardrisk Life Ltd was transferred to covered business 1 July 2014, with a statutory excess of R44 million
and capital adequacy requirement of R20 million. The figures are after non-controlling interests but excludes certain items which are eliminated on consolidation.
2. Disregarded assets are those as defined in the South African Long-term Insurance Act, 52 of 1998, and are only applicable to South African long-term insurance companies.
Adjustments are also made for the international insurance companies from reporting excess to statutory excess as required by their regulators. It includes Sage intangible
assets of R504 million (31.12.2014: R532 million; 30.06.2015: R518 million).
3. Aggregation of separate company's capital adequacy requirements (CARs), with no assumption of diversification benefits.
MMI HOLDINGS GROUP - EMBEDDED VALUE INFORMATION
EMBEDDED VALUE RESULTS AS AT
Restated
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Covered business
Reporting excess - long-term insurance business (1) 17 807 16 489 17 465
Reclassification to non-covered business (1 479) (1 243) (1 204)
16 328 15 246 16 261
Disregarded assets (2) (544) (664) (575)
Difference between statutory and published valuation methods (841) (615) (839)
Dilutory effect of subsidiaries (3) (39) (38) (38)
Consolidation adjustments (4) (32) (62) (5)
Value of MMI Group Ltd preference shares issued (500) (500) (500)
Diluted adjusted net worth - covered business 14 372 13 367 14 304
Net value of in-force business 21 607 20 869 21 696
Diluted embedded value - covered business 35 979 34 236 36 000
Non-covered business
Net assets - non-covered business within life insurance companies 1 479 1 243 1 204
Net assets - non-covered business outside life insurance companies 3 413 3 464 3 256
Consolidation adjustments and transfers to covered business (4) (3 240) (2 792) (3 024)
Adjustments for dilution (5) 783 838 819
Diluted adjusted net worth - non-covered business 2 435 2 753 2 255
Write-up to directors' value 1 762 2 764 2 075
Non-covered business (1) 3 860 4 644 4 143
Holding company expenses (6) (1 578) (1 430) (1 578)
International holding company expenses (6) (520) (450) (490)
Diluted embedded value - non-covered business 4 197 5 517 4 330
Diluted adjusted net worth 16 807 16 120 16 559
Net value of in-force business 21 607 20 869 21 696
Write-up to directors' value 1 762 2 764 2 075
Diluted embedded value 40 176 39 753 40 330
Required capital - covered business (adjusted for qualifying debt) (7) 6 621 7 048 7 306
Surplus capital - covered business 7 751 6 319 6 998
Diluted embedded value per share (cents) 2 505 2 478 2 514
Diluted adjusted net worth per share (cents) 1 048 1 005 1 032
Diluted number of shares in issue (million) (8) 1 604 1 604 1 604
1. On 1 July 2014 Guardrisk Life Ltd was transferred to covered business (adjusted net worth of R44 million and value of in-force of R324 million). The December 2014 comparatives
have been restated to reflect the transfer of Guardrisk Life Ltd to covered business.
2. Disregarded assets include Sage intangible assets of R504 million (31.12.2014: R532 million; 30.06.2015: R518 million), goodwill and various other items.
3. For accounting purposes, Metropolitan Health has been consolidated at 100%, while MMI Holdings Namibia, Metropolitan Kenya and Cannon have been consolidated at 96% in the
statement of financial position, for the current year. For embedded value purposes, disclosed on a diluted basis, the non-controlling interests and related funding have been
reinstated.
4. Consolidation adjustments include mainly goodwill and intangibles in subsidiaries that are eliminated.
5. Adjustments for dilution are made up as follows:
- Dilutory effect of subsidiaries (note 3): R116 million (31.12.2014: R115 million; 30.06.2015: R103 million)
- Treasury shares held on behalf of contract holders: R384 million (31.12.2014: R420 million; 30.06.2015: R424 million)
- Liability - MMI Holdings Ltd convertible preference shares issued to KTH: R283 million (31.12.2014: R303 million; 30.06.2015: R292 million)
6. The holding company expenses reflect the present value of projected recurring head office expenses. The international holding company expenses reflect the allowance for
support services to the international life assurance and health businesses.
7. The required capital for covered business amounts to R10 147 million (31.12.2014: R10 342 million; 30.06.2015: R10 604 million) and is adjusted for qualifying debt of
R3 526 million (31.12.2014: R3 294 million; 30.06.2015: R3 298 million).
8. The diluted number of shares in issue takes into account all issued shares, assuming conversion of the convertible redeemable preference shares, and includes the treasury
shares held on behalf of contract holders.
ANALYSIS OF NET VALUE OF IN-FORCE BUSINESS
Restated Restated
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Momentum Retail 11 246 11 097 11 331
Gross value of in-force business 12 501 12 680 12 819
Less cost of required capital (1 255) (1 583) (1 488)
Metropolitan Retail 3 364 3 551 3 582
Gross value of in-force business 4 079 4 301 4 288
Less cost of required capital (715) (750) (706)
Corporate and Public Sector (1) 4 751 4 271 4 657
Gross value of in-force business 5 512 4 966 5 354
Less cost of required capital (761) (695) (697)
International 2 164 1 950 2 108
Gross value of in-force business 2 382 2 131 2 310
Less cost of required capital (218) (181) (202)
Shareholder Capital 82 - 18
Gross value of in-force business 82 - 18
Less cost of required capital - - -
Net value of in-force business 21 607 20 869 21 696
Notes
1. December 2014 has been restated to include Guardrisk Life Ltd within the Corporate and Public Sector.
EMBEDDED VALUE DETAIL
Adjusted Net value Restated
net worth of in-force 31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm Rm Rm
Covered business
South African life licences 12 384 19 444 31 828 30 712 32 040
MMI Group Ltd 12 176 18 799 30 975 30 300 31 332
Guardrisk Life Ltd (1) 149 645 794 350 649
Metropolitan Odyssey Ltd 59 - 59 62 59
International 1 988 2 163 4 151 3 524 3 960
MMI Holdings Namibia Ltd 703 1 287 1 990 1 917 1 972
Metropolitan Life of Botswana Ltd 427 251 678 372 571
Metropolitan Lesotho Ltd 347 491 838 798 847
Other international businesses (2) 511 134 645 437 570
Total covered business 14 372 21 607 35 979 34 236 36 000
Write-up to
Adjusted directors' Restated
net worth value 31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm Rm Rm
Non-covered business
Momentum Investments (3) 1 143 1 181 2 324 2 028 2 165
Health businesses (4) 321 984 1 305 2 045 1 660
Momentum Retail (Wealth) (4) 402 461 863 702 817
Guardrisk business (1,4) 532 987 1 519 1 499 1 446
Momentum Short-term Insurance (MSTI) 292 65 357 319 377
International (5,6) (244) (338) (582) (593) (805)
MMI Holdings (after consolidation adjustments) (6) (11) (1 578) (1 589) (483) (1 330)
Total non-covered business 2 435 1 762 4 197 5 517 4 330
Total embedded value 16 807 23 369 40 176 39 753 40 330
Diluted adjusted net worth - non-covered business (2 435)
Adjustments to covered business - adjusted net worth 3 435
Reporting excess - long-term insurance business 17 807
1. On 1 July 2014 Guardrisk Life Ltd was transferred to covered business (adjusted net worth of R44 million and value of in-force of R324 million). The December 2014
comparatives have been restated to reflect the transfer of Guardrisk Life Ltd to covered business.
2. African life and health businesses are included in covered business for embedded value purposes.
3. Momentum Investments subsidiaries are valued using forward price-earnings multiples applied to the relevant sustainable earnings bases.
4. The Health businesses, Momentum Retail (Wealth off-balance sheet) and Guardrisk are valued using embedded value methodology.
5. Cannon is included within International's non-covered business at 31 December 2015.
6. The holding company expenses reflect the present value of projected recurring head office expenses. The international holding company expenses reflect the allowance for
support services to the international life assurance and health businesses.
ANALYSIS OF CHANGES IN GROUP EMBEDDED VALUE
Restated
6 mths to 6 mths to 12 mths to
Covered business 31.12.2015 31.12.2014 30.06.2015
Adjusted Gross
Notes net worth value of Cost of
(ANW) in-force (VIF) CAR Total EV Total EV Total EV
Rm Rm Rm Rm Rm Rm
Profit from new business (748) 1 220 (85) 387 448 1 054
Embedded value from new business A (748) 1 194 (85) 361 421 954
Expected return to end of period B - 26 - 26 27 100
Profit from existing business 2 081 (917) 53 1 217 1 549 3 263
Expected return - unwinding of RDR B - 1 295 (166) 1 129 1 089 2 213
Release from the cost of required capital C - - 228 228 215 445
Expected (or actual) net of tax profit transfer to net worth D 2 087 (2 087) - - - -
Operating experience variances E 59 (13) (9) 37 260 701
Development expenses F (53) - - (53) (45) (79)
Operating assumption changes G (12) (112) - (124) 30 (17)
Embedded value profit from operations 1 333 303 (32) 1 604 1 997 4 317
Investment return on adjusted net worth H 315 - - 315 431 664
Investment variances I 68 (44) 183 207 (495) (406)
Economic assumption changes J (52) (530) 7 (575) 115 58
Exchange rate movements K 104 38 (14) 128 4 (7)
Embedded value profit - covered business 1 768 (233) 144 1 679 2 052 4 626
Transfer of business (to)/from non-covered business L (40) 1 - (39) 388 523
Changes in share capital M 47 (1) - 46 30 202
Dividend paid (1 707) - - (1 707) (2 627) (3 744)
Change in embedded value - covered business 68 (233) 144 (21) (157) 1 607
Non-covered business
Change in directors' valuation and other items (332) 261 (557)
Holding company expenses (30) (87) (275)
Embedded value profit - non-covered business (362) 174 (832)
Changes in share capital M (46) (30) (202)
Dividend paid 257 502 649
Finance costs - preference shares (21) (23) (44)
Transfer of business to covered business L 39 (388) (523)
Change in embedded value - non-covered business (133) 235 (952)
Total change in group embedded value (154) 78 655
Total embedded value profit 1 317 2 226 3 794
Return on embedded value (%) - internal rate of return 6.6% 11.5% 9.6%
A. VALUE OF NEW BUSINESS
VALUE OF NEW BUSINESS
Corporate and
Momentum Retail Metropolitan Retail Public Sector (1,2) International Total
Rm Rm Rm Rm Rm
6 mths to 31.12.2015
Value of new business 126 68 137 30 361
Gross 163 92 154 37 446
Less cost of required capital (37) (24) (17) (7) (85)
New business premiums 9 690 1 171 3 281 429 14 571
Recurring premiums 627 530 862 221 2 240
Single premiums 9 063 641 2 419 208 12 331
New business premiums (APE) 1 533 594 1 104 242 3 473
New business premiums (PVP) 12 673 2 411 10 921 1 265 27 270
Profitability of new business as a percentage of APE 8.2 11.4 12.4 12.4 10.4
Profitability of new business as a percentage of PVP 1.0 2.8 1.3 2.4 1.3
Restated
6 mths to 31.12.2014
Value of new business 127 107 160 27 421
Gross 162 130 181 34 507
Less cost of required capital (35) (23) (21) (7) (86)
New business premiums 8 513 1 171 4 190 305 14 179
Recurring premiums 630 581 509 178 1 898
Single premiums 7 883 590 3 681 127 12 281
New business premiums (APE) 1 418 640 877 191 3 126
New business premiums (PVP) 11 817 2 684 8 369 975 23 845
Profitability of new business as a percentage of APE 9.0 16.7 18.2 14.1 13.5
Profitability of new business as a percentage of PVP 1.1 4.0 1.9 2.8 1.8
Restated
12 mths to 30.06.2015
Value of new business 276 185 427 66 954
Gross 340 232 518 78 1 168
Less cost of required capital (64) (47) (91) (12) (214)
New business premiums 18 726 2 450 7 773 686 29 635
Recurring premiums 1 283 1 035 1 368 402 4 088
Single premiums 17 443 1 415 6 405 284 25 547
New business premiums (APE) 3 027 1 177 2 009 430 6 643
New business premiums (PVP) 25 458 5 091 17 683 2 164 50 396
Profitability of new business as a percentage of APE 9.1 15.7 21.3 15.3 14.4
Profitability of new business as a percentage of PVP 1.1 3.6 2.4 3.0 1.9
1. December 2014 value of new business has been restated to include Guardrisk Life Ltd as part of covered business.
2. The Corporate and Public Sector recognises cell captive business as new business at the point where all shareholder and other contractual arrangements have been finalised and
signed, even though the first premium may only be received after the end of the current reporting period.
3. Value of new business and new business premiums are net of non-controlling interests.
4. The value of new business has been calculated on closing assumptions. Investment yields at the point of sale have been used for fixed annuity and guaranteed endowment
business, for other business the investment yields at the end of the year have been used.
ANALYSIS OF NEW BUSINESS PREMIUMS
Corporate and
Momentum Retail Metropolitan Retail Public Sector (1,2) International Total
Rm Rm Rm Rm Rm
6 mths to 31.12.2015
New business premiums 9 690 1 171 3 281 429 14 571
Recurring premiums 627 530 862 221 2 240
Risk 288 339 99 - 726
Savings/Investments 339 191 124 - 654
Cell captives - - 639 - 639
International - - - 221 221
Single premiums 9 063 641 2 419 208 12 331
Savings/Investments 8 672 145 1 736 - 10 553
Annuities 391 496 683 - 1 570
International - - - 208 208
New business premiums (APE) 1 533 594 1 104 242 3 473
Risk 288 339 99 - 726
Savings/Investments 1 206 205 298 - 1 709
Annuities 39 50 68 - 157
Cell captives - - 639 - 639
International - - - 242 242
Restated
6 mths to 31.12.2014
New business premiums 8 513 1 171 4 190 305 14 179
Recurring premiums 630 581 509 178 1 898
Risk 288 373 187 - 848
Savings/Investments 342 208 307 - 857
Cell captives - - 15 - 15
International - - - 178 178
Single premiums 7 883 590 3 681 127 12 281
Savings/Investments 7 527 123 2 081 - 9 731
Annuities 356 467 1 600 - 2 423
International - - - 127 127
New business premiums (APE) 1 418 640 877 191 3 126
Risk 288 373 187 - 848
Savings/Investments 1 094 220 515 - 1 829
Annuities 36 47 160 - 243
Cell captives - - 15 - 15
International - - - 191 191
Restated
12 mths to 30.06.2015
New business premiums 18 726 2 450 7 773 686 29 635
Recurring premiums 1 283 1 035 1 368 402 4 088
Risk 550 658 575 - 1 783
Savings/Investments 733 377 556 - 1 666
Cell captives - - 237 - 237
International - - - 402 402
Single premiums 17 443 1 415 6 405 284 25 547
Savings/Investments 16 787 277 4 283 - 21 347
Annuities 656 1 138 2 122 - 3 916
International - - - 284 284
New business premiums (APE) 3 027 1 177 2 009 430 6 643
Risk 550 658 575 - 1 783
Savings/Investments 2 412 405 984 - 3 801
Annuities 65 114 213 - 392
Cell captives - - 237 - 237
International - - - 430 430
1. December 2014 value of new business has been restated to include Guardrisk Life Ltd as part of covered businesss.
2. The Corporate and Public Sector recognises cell captive business as new business at the point where all shareholder and other contractual arrangements have been finalised and
signed, even though the first premium may only be received after the end of the current reporting period.
RECONCILIATION OF LUMP SUM INFLOWS
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Total lump sum inflows 15 217 17 218 33 023
Inflows not included in value of new business (3 592) (5 163) (8 966)
Term extensions on maturing policies 198 265 558
Retirement annuity proceeds invested in living annuities 518 - 822
Non-controlling interests and other adjustments (10) (39) 110
Single premiums included in value of new business 12 331 12 281 25 547
B. EXPECTED RETURN
The expected return is determined by applying the risk discount rate applicable at the beginning of the reporting year to the present value of in-force covered business at the
beginning of the reporting year and adding the expected return on new business, which is determined by applying the current risk discount rate to the value of new business
from the point of sale to the end of the year.
C. RELEASE FROM THE COST OF REQUIRED CAPITAL
The release from the cost of required capital represents the difference between the risk discount rate and the expected after tax investment return on the assets backing the
required capital over the year.
D. EXPECTED (OR ACTUAL) NET OF TAX PROFIT TRANSFER TO NET WORTH
The expected profit transfer for covered business from the present value of in-force to the adjusted net worth is calculated on the statutory valuation method.
E. OPERATING EXPERIENCE VARIANCES
OPERATING EXPERIENCE VARIANCES
Restated Restated
6 mths to 31.12.2015 6 mths to 12 mths to
31.12.2014 30.06.2015
Notes ANW Net VIF EV EV EV
Rm Rm Rm Rm Rm
Momentum Retail 56 (23) 33 127 316
Mortality and morbidity 1,2 61 10 71 151 365
Terminations, premium cessations and policy alterations 3 (77) - (77) (17) (75)
Expense variance 4 (14) - (14) 11 (37)
Other 5 86 (33) 53 (18) 63
Metropolitan Retail 36 25 61 61 140
Mortality and morbidity 1 24 4 28 28 85
Terminations, premium cessations and policy alterations 6 15 22 37 9 (20)
Expense variance (1) - (1) 10 26
Other (2) (1) (3) 14 49
Corporate and Public Sector (48) (37) (85) (46) (4)
Mortality and morbidity 7 (91) (1) (92) 35 24
Terminations 8 5 (53) (48) (6) 9
Expense variance 4 (30) - (30) (27) (19)
FNB Life - share of profits 17 - 17 19 38
Other 5 51 17 68 (67) (56)
International (11) 46 35 70 119
Mortality and morbidity 1 27 27 54 45 109
Terminations, premium cessations and policy alterations (12) (1) (13) 28 (11)
Expense variance (21) 5 (16) (23) (28)
Other (5) 15 10 20 49
Shareholder Capital 26 (5) 21 38 151
Opportunity cost of required capital - (28) (28) 10 (21)
Total operating experience variances 59 (22) 37 260 701
Notes
1. Overall, mortality and morbidity experience for the 6 months were better compared to what was allowed for in the valuation basis.
2. The decline relative to prior periods was mainly due to an increase in mortality claims experience.
3. Better than expected termination experience on whole life insurance contracts as well as the impact of higher than expected loyalty reward discounts and clients choosing lower
fee products negatively impacted the embedded value.
4. Overall experience was worse than expected due to proportionally higher internal cost allocations to covered segments in line with the new client centric model. This is offset
by lower non-covered expenses.
5. Various smaller items including taxation and liability matching activities.
6. The positive variance is a result of improved persistency experience on group individual risk business.
7. The negative variance is a result of disability in payment experience.
8. Higher than expected terminations on risk business.
F. DEVELOPMENT EXPENSES
Business development expenses, comprising mainly middle market and other initiatives within Momentum Retail and Metropolitan Retail.
G. OPERATING ASSUMPTION CHANGES
OPERATING ASSUMPTION CHANGES
Restated Restated
6 mths to 12 mths to
6 mths to 31.12.2015 31.12.2014 30.06.2015
Notes ANW Net VIF EV EV EV
Rm Rm Rm Rm Rm
Momentum Retail - (15) (15) 21 63
Mortality and morbidity assumptions - - - - 235
Termination assumptions - - - - (19)
Renewal expense assumptions (1) (4) (5) 23 (28)
Modelling, methodology and other changes 1 (11) (10) (2) (125)
Metropolitan Retail 6 - 6 4 60
Mortality and morbidity assumptions - - - - 95
Termination assumptions - - - - (21)
Renewal expense assumptions - - - - 30
Modelling, methodology and other changes 6 - 6 4 (44)
Corporate and Public Sector 1 (73) (72) (8) (104)
Mortality and morbidity assumptions - - - - (81)
Termination assumptions - - - (1) 63
Renewal expense assumptions 1 - (77) (77) 27 (155)
Modelling, methodology and other changes 1 4 5 (34) 69
International (19) (24) (43) 13 86
Mortality and morbidity assumptions - 1 1 32 48
Termination assumptions - - - (1) (4)
Renewal expense assumptions - (8) (8) (1) 22
Modelling, methodology and other changes 2 (19) (17) (36) (17) 20
Shareholder Capital - - - - (111)
Methodology change: cost of required capital - - - - (11)
Total operating assumption changes (12) (112) (124) 30 (17)
Notes
1. Impact of lower than expected sales volumes on expense recoveries.
2. Valuation methodology refinements mainly related to the Namibian business.
H. INVESTMENT RETURN ON ADJUSTED NET WORTH
INVESTMENT RETURN ON ADJUSTED NET WORTH
6 mths to 6 mths to 12 mths to
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Investment income 281 426 618
Capital appreciation and other 50 20 77
Preference share dividends paid and change in fair value of preference shares (16) (15) (31)
Investment return on adjusted net worth 315 431 664
I. INVESTMENT VARIANCES
Investment variances represent the impact of higher/lower than assumed investment returns on current and expected future after tax profits from in-force business.
J. ECONOMIC ASSUMPTION CHANGES
The economic assumption changes include the effect of the change in assumed rate of investment return, expense inflation rate and risk discount rate in respect of local and
offshore business.
K. EXCHANGE RATE MOVEMENTS
The impact of foreign currency movements on International covered businesses.
L. TRANSFER OF BUSINESS (TO)/FROM NON-COVERED BUSINESS
This transfer mainly relates to the recapitalisation of non-covered subsidiaries of the life licence.
M. CHANGES IN SHARE CAPITAL
Changes in share capital include the recapitalisation of some of the International subsidiaries.
COVERED BUSINESS: SENSITIVITIES - 31.12.2015
In-force business New business written
Adjusted Cost of Cost of
net worth Net value Gross value CAR (3) Net value Gross value CAR (3)
Rm Rm Rm Rm Rm Rm Rm
Base value 14 372 21 607 24 556 (2 949) 361 446 (85)
1% increase in risk discount rate 19 904 23 185 (3 281) 290 381 (91)
% change (8) (6) 11 (20) (15) 7
1% reduction in risk discount rate 23 521 26 096 (2 575) 441 519 (78)
% change 9 6 (13) 22 16 (8)
10% decrease in future expenses 22 743 25 692 (2 949) 411 496 (85)
% change (1) 5 5 - 14 11 -
10% decrease in lapse, paid-up and surrender rates 22 287 25 282 (2 995) 423 513 (90)
% change 3 3 2 17 15 6
5% decrease in mortality and morbidity for assurance business 23 134 26 095 (2 961) 433 518 (85)
% change 7 6 - 20 16 -
5% decrease in mortality for annuity business 21 259 24 241 (2 982) 356 441 (85)
% change (2) (1) 1 (1) (1) -
1% reduction in gross investment return, inflation rate and risk discount rate 14 337 22 330 25 279 (2 949) 399 484 (85)
% change (2) - 3 3 - 11 9 -
1% reduction in inflation rate 22 368 25 317 (2 949) 390 475 (85)
% change 4 3 - 8 7 -
10% fall in market value of equities and properties 14 013 20 458 23 387 (2 929)
% change (2) (5) (5) (1)
10% reduction in premium indexation take-up rate 21 320 24 257 (2 937) 345 430 (85)
% change (1) (1) - (4) (4) -
10% decrease in non-commission related acquisition expenses 411 496 (85)
% change 14 11 -
1% increase in equity/property risk premium 22 107 25 054 (2 947) 382 467 (85)
% change 2 2 - 6 5 -
1. No corresponding changes in variable policy charges are assumed, although in practice it is likely that these will be modified according to circumstances.
2. Bonus rates are assumed to change commensurately.
3. The change in the value of cost of required capital is disclosed as nil where the sensitivity test results in an insignificant change in the value.
MMI HOLDINGS GROUP - ADDITIONAL INFORMATION
ANALYSIS OF ASSETS MANAGED AND/OR ADMINISTERED (1)
Restated Restated
31.12.2015 31.12.2014 30.06.2015
Rm Rm Rm
Managed and/or administered by Investments
Financial assets 460 941 439 659 456 663
Momentum Manager of Managers 110 635 109 956 117 416
Momentum Investment Consultants 10 343 10 826 11 715
Momentum Collective Investments 62 067 61 291 63 817
Metropolitan Collective Investments 37 034 24 732 24 775
Momentum Asset Management 177 376 180 331 183 198
Momentum Global Investments 57 161 46 656 48 639
Momentum Alternative Investments 6 325 5 867 7 103
Properties - Eris Property Group 28 782 26 903 26 133
On-balance sheet 8 459 7 776 8 066
Off-balance sheet 20 323 19 127 18 067
Momentum Wealth linked product assets under administration 152 439 130 569 138 854
On-balance sheet 95 329 79 078 85 433
Off-balance sheet 57 110 51 491 53 421
Managed internally or by other managers within MMI 74 773 63 358 70 450
On-balance sheet 68 867 57 976 64 872
Off-balance sheet 5 906 5 382 5 578
Managed by external managers (on-balance sheet) 16 754 15 832 16 789
Properties managed internally or by other managers within MMI or externally 2 445 2 510 2 506
Corporate and Public Sector - segregated assets 210 200 200
Corporate and Public Sector - cell captives on-balance sheet 17 821 13 024 16 381
Total assets managed and/or administered 754 165 692 055 727 976
Managed and/or administered by Investments
On-balance sheet 255 931 250 692 259 594
Off-balance sheet 205 010 188 967 197 069
460 941 439 659 456 663
1. Assets managed and/or administered are included where an entity earns a fee on the assets. Non-financial assets (except properties) have been excluded.
NET FUNDS RECEIVED FROM CLIENTS (1)
Gross single Gross recurring Gross Gross Net inflow/
inflows inflows inflow outflow (outflow)
6 mths to 31.12.2015 Rm Rm Rm Rm Rm
Momentum Retail 8 145 4 575 12 720 (12 540) 180
Metropolitan Retail 654 2 991 3 645 (3 232) 413
Corporate and Public Sector 6 167 7 494 13 661 (15 339) (1 678)
International 251 1 774 2 025 (1 208) 817
Long-term insurance business fund flows 15 217 16 834 32 051 (32 319) (268)
Off-balance sheet fund flows
Managed and/or administered by Investments 45 756 (45 170) 586
Properties - Eris Property Group 3 818 (1 562) 2 256
Momentum Wealth linked product assets under administration 3 850 (3 858) (8)
Managed internally or by other managers within MMI 441 (268) 173
Corporate and Public Sector - segregated assets 9 - 9
Total net funds received from clients 85 925 (83 177) 2 748
NET FUNDS RECEIVED FROM CLIENTS (1)
Gross single Gross recurring Gross Gross Net inflow/
Restated inflows inflows inflow outflow (outflow)
6 mths to 31.12.2014 Rm Rm Rm Rm Rm
Momentum Retail 7 542 4 353 11 895 (12 221) (326)
Metropolitan Retail 591 2 865 3 456 (2 408) 1 048
Corporate and Public Sector 8 847 6 927 15 774 (12 910) 2 864
International 238 1 488 1 726 (973) 753
Long-term insurance business fund flows 17 218 15 633 32 851 (28 512) 4 339
Off-balance sheet fund flows
Managed and/or administered by Investments (2) 36 234 (66 205) (29 971)
Properties - Eris Property Group 2 199 (114) 2 085
Momentum Wealth linked product assets under administration 6 376 (5 452) 924
Managed internally or by other managers within MMI 1 743 (1 725) 18
Corporate and Public Sector - segregated assets 9 - 9
Total net funds received from clients 79 412 (102 008) (22 596)
1. Assets managed and/or administered are included where an entity earns a fee on the assets. Non-financial assets (except properties) have been excluded.
2. Includes outflows of R31 billion relating to Metropolitan Collective Investments.
NET FUNDS RECEIVED FROM CLIENTS (1)
Gross single Gross recurring Gross Gross Net inflow/
Restated inflows inflows inflow outflow (outflow)
12 mths to 30.06.2015 Rm Rm Rm Rm Rm
Momentum Retail 15 684 8 992 24 676 (24 088) 588
Metropolitan Retail 1 415 5 495 6 910 (4 967) 1 943
Corporate and Public Sector 15 576 14 345 29 921 (27 500) 2 421
International 348 3 215 3 563 (1 953) 1 610
Long-term insurance business fund flows 33 023 32 047 65 070 (58 508) 6 562
Off-balance sheet fund flows
Managed and/or administered by Investments (2) 72 017 (95 906) (23 889)
Properties - Eris Property Group 2 912 (1 886) 1 026
Momentum Wealth linked product assets under administration 10 168 (10 582) (414)
Managed internally or by other managers within MMI 1 280 (1 117) 163
Corporate and Public Sector - segregated assets 9 - 9
Total net funds received from clients 151 456 (167 999) (16 543)
1. Assets managed and/or administered are included where an entity earns a fee on the assets. Non-financial assets (except properties) have been excluded.
2. Includes outflows of R31 billion relating to Metropolitan Collective Investments.
ANALYSIS OF ASSETS BACKING SHAREHOLDER EXCESS
31.12.2015 31.12.2014 30.06.2015
Rm % Rm % Rm %
Equity securities 504 2.0 1 699 7.1 346 1.4
Preference shares 1 406 5.7 1 363 5.7 1 497 6.1
Collective investment schemes 208 0.8 523 2.2 523 2.1
Debt securities 3 246 13.1 4 321 18.0 4 761 19.4
Properties 2 891 11.6 2 262 9.4 2 241 9.1
Owner-occupied properties 1 410 5.7 1 463 6.1 1 509 6.1
Investment properties 1 481 6.0 799 3.3 732 3.0
Cash and cash equivalents and funds on deposit 7 702 31.0 6 408 26.7 9 368 38.2
Intangible assets 8 388 33.8 8 525 35.5 8 503 34.6
Other net assets 4 686 18.9 2 939 12.2 1 322 5.4
29 031 116.9 28 040 116.7 28 561 116.4
Redeemable preference shares (283) (1.1) (303) (1.3) (292) (1.2)
Subordinated redeemable debt (3 526) (14.2) (3 294) (13.7) (3 298) (13.4)
Treasury shares (384) (1.5) (420) (1.7) (424) (1.7)
Shareholder excess per reporting basis 24 838 100.0 24 023 100.0 24 547 100.0
NUMBER OF EMPLOYEES 31.12.2015
Indoor staff 10 647
Segments
Momentum Retail 1 449
Metropolitan Retail 1 249
Corporate and Public Sector 1 007
International 1 156
Shareholder Capital 282
Centres of Excellence
Investments and savings solutions 518
Legacy solutions 205
Life insurance solutions 488
Health solutions 3 037
Short-term insurance solutions 289
Group services divisions 967
Field staff 6 247
International 1 905
Investments and savings solutions 10
Momentum Retail 258
Metropolitan Retail 4 074
Total 16 894
NUMBER OF EMPLOYEES (pre-restructure) 31.12.2014 30.06.2015
Indoor staff 10 488 10 438
Momentum Retail 1 686 1 841
Metropolitan Retail 1 093 1 052
Momentum Employee Benefits 1 642 1 668
International 1 185 1 010
Momentum Investments 671 651
Metropolitan Health 3 067 2 902
Shareholder Capital
Balance Sheet Management 78 78
Group services 802 925
Short-term insurance 264 311
Field staff 7 488 6 801
Momentum Retail 1 221 1 327
Metropolitan Retail 4 974 3 840
International 1 293 1 634
Total 17 976 17 239
MMI HOLDINGS GROUP - STOCK EXCHANGE PERFORMANCE
STOCK EXCHANGE PERFORMANCE
31.12.2015 30.06.2015 31.12.2014 30.06.2014
6 month period
Value of listed shares traded (rand million) 14 700 11 987 7 166 8 370
Volume of listed shares traded (million) 580 381 260 338
Shares traded (% of average listed shares in issue) (1) 74 49 33 43
Trade prices
Highest (cents per share) 3 149 3 475 3 192 2 783
Lowest (cents per share) 1 900 2 829 2 502 2 228
Last sale of period (cents per share) 2 200 3 015 3 000 2 625
Annualised percentage (%) change during period (47) 1 31 8
Annualised percentage (%) change - life insurance sector (J857) (3) 12 10 25
Annualised percentage (%) change - top 40 index (J200) (1) 10 (9) 23
31 December/30 June
Price/diluted core headline earnings (segmental) ratio 10.5 12.6 13.0 11.6
Dividend yield % (dividend on listed shares) (1) 7.1 5.1 4.9 5.4
Dividend yield % - top 40 index (J200) (1) 3.1 2.9 2.9 2.6
Total shares issued (million)
Ordinary shares listed on JSE 1 573 1 572 1 571 1 570
Treasury shares held on behalf of contract holders (17) (14) (14) (14)
Basic number of shares in issue 1 556 1 558 1 557 1 556
Treasury shares held on behalf of contract holders 17 14 14 14
Convertible redeemable preference shares 31 32 33 34
Diluted number of shares in issue (2) 1 604 1 604 1 604 1 604
Market capitalisation at end (Rbn) (3) 35 48 48 42
1. Percentages have been annualised.
2. The diluted number of shares in issue takes into account all issued shares, assuming conversion of the convertible redeemable preference shares,
and includes the treasury shares held on behalf of contract holders.
3. The market capitalisation is calculated on the fully diluted number of shares in issue.
Date: 03/03/2016 07:05:00 Supplied by www.sharenet.co.za
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