MMI HOLDINGS LIMITED - MMI is resilient in a tough environment

MMI is resilient in a tough environment

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 “company" or “group”)

Media release
MMI year-end results 2016
September 2016

MMI is resilient in a tough environment

7 September 2016 - MMI Holdings announced its year-end results to 30 June 2016
in a very tough environment characterised by economic weakness, subdued markets
and increased pressure on consumers’ disposable income.

MMI Holdings delivered a strong return on embedded value of 13%, representing
embedded value earnings of R5.2 billion for the reporting period. Core headline
earnings decreased by 16% to R3.2 billion, driven  primarily by lower
underwriting profits and muted investment markets. A final ordinary dividend of
92 cents per share was declared by the group resulting in a total dividend of
157 cents per share for the year.

Nicolaas Kruger, group CEO of MMI Holdings says, “This has been a difficult
operating environment for the group as consumers are facing increasing pressure
on their disposable income. However the implementation of our client-centricity
strategy is advancing well and we continue to focus on enhancing the lifetime
financial wellness of our clients.”

New business volumes on a present value of premiums basis increased by a very
strong 35% compared to the prior year, driven by strong growth from the
Corporate and Public Sector and the International segments. The turnaround in
productivity of Metropolitan Retail’s distribution channels has also continued,
delivering recurring premium growth of 31% in the last quarter of the financial
year. The value of new business declined by 11% to R850 million, largely
attributable to higher discount rates. The value of new business increased by
13% on a like-for-like basis.

Client retention across the group remained satisfactory. Multiply, MMI Holdings’
wellness and rewards programme strengthened client engagement and is growing
steadily. Aimed at unlocking the financial wellness of clients, Multiply
educates, empowers, and encourages members for doing the everyday things that
ensure a physically and financially healthy lifestyle.

MMI Holdings remains in a strong capital position with a capital buffer of R4
billion as at 30 June 2016, after allowing for capital requirements, strategic
growth initiatives and the final dividend. The group has set a cost saving
target of R750 million to be achieved by financial year 2019. Good expense
management has produced total cost savings of R104 million so far in 2016 which
is ahead of the planned cost savings.

The group’s strategic growth initiatives are progressing well. Momentum Short-
term Insurance made good progress to turn the business around, reducing the
claims ratio to 82%. The group also announced that it is launching a micro
insurance joint venture with mobile operator MTN Group in selected African
countries. In addition MMI Holdings has received final approval from the Indian
insurance regulator to launch Aditya Birla Health Insurance Co. Limited, a joint
venture with Indian conglomerate Aditya Birla Group to provide health insurance
and incentivised wellness solutions in the Indian market. MMI Holdings has also
made good progress to advance innovation with the creation of Exponential
Ventures. This business is tasked with exploring opportunities for investing in
innovative tech-driven start-up companies that have the potential to disrupt the
insurance industry. The unit has concluded two partnership agreements, with
Anthemis Group in the United Kingdom and 4Di Capital in South Africa.

“MMI Holdings looks forward to the long-term benefits that these strategic
initiatives will provide for the group and its stakeholders. MMI Holdings is
firmly focused on clients and providing appropriate solutions that will meet
their lifetime financial wellness needs. In this regard we are very pleased to
have emerged first and second for Metropolitan and Momentum in the latest
independent South African Customer Satisfaction Index of life insurers,”
concludes Kruger.


End
7 September 2016
Centurion

SPONSOR: Merrill Lynch South Africa (Pty) Ltd

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