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Summarised and Unaudited Group Results for the six months ended 31 December 2016
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 GROUP RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016
FINANCIAL HIGHLIGHTS
- NEW BUSINESS PVP up 2% to R21.3 billion
- VALUE of NEW BUSINESS up 4% to R292 million on a like-for-like basis
- NEW BUSINESS MARGIN stable at 1.4%
- EXPENSE OPTIMISATION PROJECT R167 million in savings to date
- Diluted CORE HEADLINE EARNINGS down 5% to R1 598 million
- Interim DIVIDEND maintained at 65 cents per share
SUMMARY OF RESULTS
Group results
MMI remained resilient in a tough environment.
- Diluted core headline earnings decreased by 5% to R1 598 million; mainly due to lower morbidity profits, lower health administration revenues, and weak growth in
asset-based fee income as a result of weak investment markets.
- Diluted basic earnings and diluted headline earnings ended the period 33% and 29% lower respectively as rand strengthening negatively affected investment returns on
shareholder funds. The prior period also included gains arising from the technical accounting treatment of policyholder funds holding MMI shares which was not repeated in the
past six months.
- An embedded value of R42.5 billion (2 648 cents per share) was recorded, reflecting a 4.5% annualised return on embedded value for the period.
- New business volumes on the present value of premiums basis (PVP) increased 2% on the prior year. Metropolitan Retail, Corporate and Public Sector, and International
all posted growth year-on-year.
- Value of new business of R292 million was 3% lower than in 1H16. The margin was, however, maintained relatively stable at 1.4% of premiums. There was significant
margin improvement at Metropolitan Retail and at International. Notably, value of new business increased 4% on the prior year, if considered on a like-for-like basis.
- Underwriting experience in the retail segments remains satisfactory, especially in Metropolitan Retail.
- High group disability claims, largely linked to the current unfavourable economic conditions, remained high, and resulted in R57 million reduction in earnings relative to
prior year.
- Health administration revenues were under pressure following the exit of two major clients in the prior period and earnings declined by R70 million in health operations. The
restructuring of the health operations are, however, now largely complete and the decline in earnings has been less than originally budgeted for.
- Client Engagement Solutions houses our loyalty program, Multiply, and various other engagement initiatives in the group. We continue to grow Multiply membership and
are also making good progress with other engagement activities.
- Good expense management once again contributed positively to value creation. MMI is targeting a reduction in annual expenses of R750 million by financial year 2019.
During 1H17 expense savings of R63 million were achieved towards this target.
- An interim dividend of 65 cents per share was declared which equals the interim dividend declared in the prior year.
Capital strength
- A capital buffer of R3.0 billion was recorded as at 31 December 2016, after allowing for economic capital requirements, strategic growth initiatives and the final
dividend.
- During the six months Moody's affirmed the Aaa.za national scale insurance financial strength (IFS) rating on MMI Group Limited (MMIGL). They also affirmed the Aa2.za
rating on MMIGL's unsecured subordinated notes on the national scale.
- Taking into account the planned growth initiatives, the changing regulations including Solvency Assessment and Management and the difficult economic outlook, the group
is satisfied that its present capital level is appropriate.
Transformation
- MMI is proud to have remained a level two broad-based black economic empowerment (B-BBEE) contributor.
Prospects
- The strategic focus areas of the MMI group are client centricity, growth and excellence.
- While overall group strategy remains unchanged, we have identified Client Engagement Solutions and Multiply as areas of specific strategic importance in order to differentiate
our client value proposition.
- MMI continues to invest in growth initiatives with the aim of enhancing shareholder value over the longer term. Going forward an increasing amount of our investment
budget will be allocated to initiatives that broaden our South African distribution footprint.
- Our health insurance JV in India is likely to be our largest ongoing investment initiative outside of South Africa in the near future.
- MMI has implemented strategies to continue unlocking value and generating the required return on capital for shareholders over time.
ADDITIONAL INFORMATION
Investors are recommended to download the result presentation and analyst booklet from www.mmiholdings.co.za for additional information around the 1H17 results.
SUMMARY OF FINANCIAL INFORMATION
Unaudited results for the six months ended 31 December 2016
DIRECTORS' STATEMENT
The directors take pleasure in presenting the unaudited summarised interim results of MMI Holdings financial services group for the period ended 31 December 2016. The
preparation of the group's results was supervised by the group finance director, Mary Vilakazi, CA(SA).
Corporate events
During the current period, the FSB approved the transfer of the FNB Life book of business from MMI Group Ltd to FirstRand Life Assurance Ltd. MMI Group Ltd recognised a profit
of R73 million relating to the sale which was effective from 1 October 2016. There were no other corporate events in the current period.
Basis of preparation of financial information
These summarised consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS); International Accounting
Standard 34 (IAS 34) - Interim financial reporting (with the exception of disclosures required in terms of paragraph 16A(j)); 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 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 2016,
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 2016 and relevant to the group
- The following amendments to standards and interpretations became effective for the first time in the current period and had no impact on the group's earnings or net asset
value: Amendments to IFRS 10 Consolidated financial statements, IAS 28 Investments in associates and joint ventures, IFRS 11 Joint arrangements, IAS 1 Presentation of
financial statements, IAS 16 Property, plant and equipment, IAS 38 Intangible assets and IAS 27 Separate financial statements.
- The International Accounting Standards Board (IASB) made amendments to various standards as part of their annual improvements project. These amendments had no impact on the
group's earnings.
Segmental report
To align segmental reporting with actual management responsibilities, we have made numerous movements across the five segments. The changes can be categorised into two main
themes; (1) transfer of smaller operations previously shown as part of the Shareholder Capital segment into the client-facing segment where management responsibility actually
rests and (2) transfer of UK operations previously residing in Momentum Retail or in Shareholder Capital to the International segment. The group has also refined the manner in
which costs related to our Rewards programme are allocated. This has resulted in Momentum Retail carrying more of these costs than under the old allocation methodology. The
new segmental reporting had no impact on the current or prior period reported earnings, diluted earnings or headline earnings per share, or on the net asset value or net cash
flow.
The client-centric reporting view reflects the following segments:
Momentum Retail: Momentum Retail's focus is on the upper retail segment and the small business segment in South Africa, offering innovative and appropriate wealth creation,
risk and savings solutions. The group's short-term insurance and open medical scheme solutions are also marketed under the Momentum Retail brand. The main change during the
period was the transfer of Momentum Wealth International from Momentum Retail to the International segment.
Metropolitan Retail: The focus is on the entry-level market in South Africa, offering savings, income generation, risk and funeral products and solutions.
Corporate and Public Sector: 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. The most material impact of the segmental changes for the Corporate and
Public Sector is the inclusion of profits from Eris (property management) which was previously shown as part of the Shareholder Capital segment.
International: The International segment manages MMI's global expansion holistically in selected segments of countries where MMI is represented. Material changes to the
segmental reporting include the consolidation of most UK operations in this segment (from Momentum Retail and Shareholder Capital) and the transfer in of India and Ayo
operations (from Shareholder Capital).
Shareholder Capital: This segment is responsible for the management of the capital base of the group. Note that we have transferred almost all of the strategic initiatives out
from Shareholder Capital into the segments where management responsibility sits for these initiatives.
Embedded value information
In addition to the segmental reporting changes, the methodology for classifying business as covered or non-covered has been reviewed and the following changes have been implemented:
- Guardrisk Life business has been reclassified as non-covered as the business being written is mainly fee income in nature rather than underwriting exposure.
- An entity will only be classified as covered business once it has reached sufficient operational scale to support all operational expenses attributable to that entity.
As a result, with effect from 1 July 2015, Guardrisk Life Ltd and a number of International life and health entities were transferred to non-covered business. The December 2015 and
June 2016 comparatives have been restated to reflect these transfers to non-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
On 21 July 2016, Voyt Krzychylkiewicz was appointed as an alternative director to Peter Cooper. On 1 October 2016, Professor Stephen Jurisich was appointed to the board. On
22 November 2016, Johan Burger resigned from the board and as deputy chairman. On 1 December 2016, Louis von Zeuner was elected as deputy chairman of the board.
All transactions in listed shares of the company involving directors were disclosed on SENS.
Changes to the group executive committee
Innocent Dutiro was appointed in the role of chief executive officer of MMI's International segment from 1 July 2016. On 10 October 2016, Linda Mthenjane was appointed in the
role of group executive of human capital. On 28 February 2017, Vuyo Lee resigned as group executive officer of brand, corporate affairs and transformation. Herman Schoeman,
the current chief executive officer of the Corporate and Public Sector segment, will be the chief executive officer of the MMI Short-term Insurance Centre of Excellence from
1 March 2017. On the same day, Thinus Alsworth-Elvey will become the chief executive officer of the Corporate and Public Sector segment in addition to his current responsibilities.
Contingent liabilities and capital commitments
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 2016
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 1 March 2017, a gross interim dividend of 65 cents per ordinary share was declared by the board.
- 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, 31 March 2017, and
will be paid on Monday, 3 April 2017.
- The dividend will be subject to local dividend withholding tax at a rate of 20% (as announced in the 2017 budget) 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 52 cents per ordinary share for those shareholders who are not exempt from paying dividend tax.
- The last day to trade cum dividend will be Tuesday, 28 March 2017.
- The shares will trade ex dividend from the start of business on Wednesday, 29 March 2017.
- Share certificates may not be dematerialised or rematerialised between Wednesday, 29 March 2017 and Friday, 31 March 2017, both days inclusive.
- The number of ordinary shares at the declaration date was 1 574 615 233.
- MMI's income tax number is 975 2050 147.
Preference shares
- Dividends of R19.5 million (2015: 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. This announcement does not include the information required by paragraph 16A(j) of IAS 34. The summarised interim
results have not been reviewed or audited by the external auditors. The full summarised IAS 34 compliant results (including paragraph 16A(j) 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
1 March 2017
DIRECTORS: MJN Njeke (chairman), LL von Zeuner (deputy chairman), NAS Kruger (group chief executive officer), M Vilakazi (group finance director), P Cooper, F Jakoet,
Prof SC Jurisich, Prof JD Krige, PJ Moleketi, SA Muller, V Nkonyeni, KC Shubane, FJC Truter, BJ van der Ross, JC van Reenen, W Krzychylkiewicz (alternate to P Cooper)
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 - SOUTH AFRICA: Merrill Lynch South Africa (Pty) Ltd (registration number: 2000/031756/06)
SPONSOR - NAMIBIA: Simonis Storm Securities (Pty) Ltd
AUDITORS: PricewaterhouseCoopers Inc
REGISTERED OFFICE: 268 West Avenue, Centurion 0157
SENS ISSUE: 2 March 2017
IFRS FINANCIAL INFORMATION
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
ASSETS
Intangible assets 11 996 12 813 12 433
Owner-occupied properties 3 324 3 084 3 112
Property and equipment 386 463 432
Investment properties 7 484 7 595 7 422
Investments in associates 634 212 680
Investments in joint ventures 20 - -
Employee benefit assets 460 417 445
Financial instruments (1) 390 228 387 538 393 968
Reinsurance contract assets 4 850 3 272 5 092
Deferred income tax 328 296 279
Properties under development 249 225 187
Insurance and other receivables 4 250 5 157 4 497
Current income tax assets 548 352 537
Cash and cash equivalents 24 980 31 849 29 148
Non-current assets held for sale - - 470
Total assets 449 737 453 273 458 702
EQUITY
Equity attributable to owners of the parent 23 543 24 838 24 109
Non-controlling interests 254 395 290
Total equity 23 797 25 233 24 399
LIABILITIES
Insurance contract liabilities
Long-term insurance contracts 106 465 103 771 107 115
Short-term insurance contracts 6 984 6 914 6 978
Financial instruments
Investment contracts 254 083 253 107 257 985
- with discretionary participation features (DPF) 24 462 25 650 25 195
- designated at fair value through income 229 621 227 457 232 790
Other financial instruments (2) 39 699 45 181 41 529
Reinsurance contract liabilities 931 910 973
Deferred income tax 3 595 4 201 3 812
Employee benefit obligations 1 165 1 081 1 452
Other payables 12 860 12 668 14 384
Provisions 30 25 43
Current income tax liabilities 128 182 32
Total liabilities 425 940 428 040 434 303
Total equity and liabilities 449 737 453 273 458 702
1. Financial instruments consist of the following:
- Securities designated at fair value through income: R367 138 million (31.12.2015: R365 881 million; 30.06.2016: R373 630 million)
- Investments in associates designated at fair value through income: R13 099 million (31.12.2015: R12 168 million; 30.06.2016: R10 499 million)
- Derivative financial instruments: R2 180 million (31.12.2015: R2 537 million; 30.06.2016: R1 977 million)
- Available-for-sale: R64 million (31.12.2015: R142 million; 30.06.2016: R125 million)
- Held-to-maturity: R507 million (31.12.2015: R129 million; 30.06.2016: R122 million)
- Loans and receivables: R7 240 million (31.12.2015: R6 681 million; 30.06.2016: R7 615 million)
2. Other financial instruments consist of the following:
- Designated at fair value through income: R36 581 million (31.12.2015: R40 391 million; 30.06.2016: R38 374 million)
- Derivative financial instruments: R1 968 million (31.12.2015: R 3 807 million; 30.06.2016: R2 097 million)
- Amortised cost: R1 150 million (31.12.2015: R983 million; 30.06.2016: R1 058 million)
SUMMARISED CONSOLIDATED INCOME STATEMENT
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Net insurance premiums 14 072 14 144 28 971
Fee income (1) 3 851 3 790 7 679
Investment income 9 364 8 350 17 522
Net realised and fair value (losses)/gains (6 630) 6 417 11 824
Net income 20 657 32 701 65 996
Net insurance benefits and claims 12 241 13 046 26 609
Change in liabilities (2 418) (2 395) (674)
Change in long-term insurance contract liabilities (1 390) (1 977) 354
Change in short-term insurance contract liabilities (81) (100) (71)
Change in investment contracts with DPF liabilities (731) (488) (940)
Change in reinsurance assets (172) (81) (331)
Change in reinsurance liabilities (44) 251 314
Fair value adjustments on investment contract liabilities (301) 8 486 16 205
Fair value adjustments on collective investment scheme liabilities (1 572) 1 274 (153)
Depreciation, amortisation and impairment expenses 669 664 1 408
Employee benefit expenses 2 605 2 549 5 341
Sales remuneration 2 763 2 707 5 304
Other expenses 3 641 3 183 6 695
Expenses 17 628 29 514 60 735
Results of operations 3 029 3 187 5 261
Share of (loss)/profit of associates (36) 5 18
Share of loss of joint ventures (3) - -
Finance costs (2) (523) (468) (937)
Profit before tax 2 467 2 724 4 342
Income tax expense (1 445) (1 167) (2 164)
Earnings for the period 1 022 1 557 2 178
Attributable to:
Owners of the parent 1 015 1 537 2 142
Non-controlling interests 7 20 36
1 022 1 557 2 178
Basic earnings per ordinary share (cents) 65.0 98.7 137.6
Diluted earnings per ordinary share (cents) 64.6 97.2 135.9
1. Fee income consists of the following:
- Investment contracts: R1 276 million (31.12.2015: R1 078 million; 30.06.2016: R2 471 million)
- Trust and fiduciary services: R839 million (31.12.2015: R988 million; 30.06.2016: R1 892 million)
- Health administration: R946 million (31.12.2015: R1 107 million; 30.06.2016: R1 945 million)
- Other fee income: R790 million (31.12.2015: R617 million; 30.06.2016: R1 371 million)
2. Finance costs consist of the following:
- Preference shares issued by MMI: R58 million (31.12.2015: R54 million; 30.06.2016: R110 million)
- Subordinated debt: R176 million (31.12.2015: R169 million; 30.06.2016: R341 million)
- Cost of carry positions: R202 million (31.12.2015: R175 million; 30.06.2016: R346 million)
- Other: R87 million (31.12.2015: R70 million; 30.06.2016: R140 million)
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Earnings for the period 1 022 1 557 2 178
Other comprehensive (loss)/income, net of tax (164) 360 83
Items that may subsequently be reclassified to income (180) 323 (24)
Exchange differences on translating foreign operations (175) 320 (27)
Available-for-sale financial assets (1) 3 3
Share of other comprehensive loss of associates (4) - -
Items that will not be reclassified to income 16 37 107
Land and building revaluation 49 58 124
Remeasurements of post-employee benefit funds (24) (13) (1)
Income tax relating to items that will not be reclassified (9) (8) (16)
Total comprehensive income for the period 858 1 917 2 261
Total comprehensive income attributable to:
Owners of the parent 850 1 898 2 193
Non-controlling interests 8 19 68
858 1 917 2 261
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
31.12.2016 31.12.2015 30.06.2016 31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm Rm Rm Rm
Earnings 1 015 1 537 2 142 1 015 1 537 2 142
Finance costs - convertible preference shares 20 21 41
Dilutory effect of subsidiaries (1) (6) (14) (23)
Diluted earnings 1 029 1 544 2 160
Intangible asset and other impairments (2) 63 - 158 63 - 158
Tax on intangible asset and other impairments - - (10) - - (10)
Release of foreign currency translation reserve - - (92) - - (92)
Gain on sale of business/subsidiary (73) (115) (115) (73) (115) (115)
Headline earnings (3) 1 005 1 422 2 083 1 019 1 429 2 101
Net realised and fair value losses/(gains) on excess 2 (138) (112) 2 (138) (112)
Basis and other changes and investment variances 183 68 517 183 68 517
Adjustments for MMI shares held by policyholder funds 10 (127) (98) 20 (114) (73)
Amortisation of intangible assets relating to business combinations 293 373 618 293 373 618
Non-recurring items (4) 81 61 155 81 61 155
Core headline earnings (5) 1 574 1 659 3 163 1 598 1 679 3 206
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. Relates to impairments of Cannon goodwill and software in International in the current and prior period. The prior period also includes the impairment of Hello Doctor goodwill
and software in the health business.
3. Headline earnings consist of operating profit, investment income, net realised and fair value gains, investment variances and basis and other changes.
4. Non-recurring items include one-off costs relating mainly to the restructuring of the group.
5. 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
31.12.2016 31.12.2015 30.06.2016
Basic
Core headline earnings 100.8 106.6 203.1
Headline earnings 64.3 91.3 133.8
Earnings 65.0 98.7 137.6
Weighted average number of shares (million) 1 562 1 557 1 557
Diluted
Core headline earnings 99.6 104.7 199.9
Weighted average number of shares (million) (1) 1 604 1 604 1 604
Headline earnings 64.0 90.0 132.2
Earnings 64.6 97.2 135.9
Weighted average number of shares (million) (2) 1 592 1 588 1 589
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
2017 2016
Ordinary listed MMI Holdings Ltd shares (cents per share)
Interim - March 65 65
Final - September 92
Total 157
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 3 October 2016, 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
R369 million of the ordinary dividends declared by MMI Holdings Ltd in September 2016 (R362 million of the ordinary dividends declared in September 2015) and R261 million of
the ordinary dividends declared in March 2016 were attributable to RMI Holdings Ltd. Dividends of R19.5 million (2016: R20.1 million) were paid to KTH on the A3 MMI Holdings
Ltd preference shares. Dividends of R8 million (2016: R5 million) were paid to KTH on the MHC A ordinary shares.
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Changes in share capital
Balance at beginning and end 9 9 9
Changes in share premium
Balance at beginning 13 847 13 795 13 795
Conversion of preference shares 7 9 17
Decrease/(increase) in treasury shares held on behalf of contract holders 17 (87) 35
Balance at end 13 871 13 717 13 847
Changes in other reserves
Balance at beginning 1 955 1 866 1 866
Total comprehensive (loss)/income (165) 361 51
BEE cost 3 2 4
Change in non-distributable reserves - (2) 2
Transfer (to)/from retained earnings (41) (3) 32
Balance at end (1) 1 752 2 224 1 955
Changes in retained earnings
Balance at beginning 8 298 8 877 8 877
Total comprehensive income 1 015 1 537 2 142
Dividend paid (1 443) (1 453) (2 475)
Transactions with non-controlling interests - (76) (214)
Transfer from/(to) other reserves 41 3 (32)
Balance at end 7 911 8 888 8 298
Equity attributable to owners of the parent 23 543 24 838 24 109
Changes in non-controlling interests
Balance at beginning 290 501 501
Total comprehensive income 8 19 68
Dividend paid (28) (33) (60)
Transactions with owners (16) (92) (219)
Balance at end 254 395 290
Total equity 23 797 25 233 24 399
1. Other reserves consist of the following:
- Land and building revaluation reserve: R742 million (31.12.2015: R679 million; 30.06.2016: R742 million)
- Foreign currency translation reserve: -R57 million (31.12.2015: R493 million; 30.06.2016: R122 million)
- Revaluation of available-for-sale investments: R9 million (31.12.2015: R10 million; 30.06.2016: R11 million)
- Non-distributable reserve: R50 million (31.12.2015: R21 million; 30.06.2016: R50 million)
- Employee benefit revaluation reserve: R53 million (31.12.2015: R70 million; 30.06.2016: R77 million)
- Fair value adjustment for preference shares issued by MMI Holdings Ltd: R940 million (31.12.2015: R940 million; 30.06.2016: R940 million)
- Equity-settled share-based payment arrangements: R15 million (31.12.2015: R11 million; 30.06.2016: R13 million)
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Net cash (outflow)/inflow from operating activities (3 126) 7 503 8 842
Net cash inflow/(outflow) from investing activities 408 (342) (1 051)
Net cash outflow from financing activities (1 450) (1 486) (4 817)
Net cash flow (4 168) 5 675 2 974
Cash resources and funds on deposit at beginning 29 148 26 174 26 174
Cash resources and funds on deposit at end 24 980 31 849 29 148
PRINCIPAL ASSUMPTIONS (South Africa) (1)
31.12.2016 31.12.2015 30.06.2016
% % %
Pre-tax investment return
Equities 12.8 13.6 12.7
Properties 10.3 11.1 10.2
Government stock 9.3 10.1 9.2
Other fixed-interest stocks 9.8 10.6 9.7
Cash 8.3 9.1 8.2
Risk-free return (2) 9.3 10.1 9.2
Risk discount rate (RDR) 11.5 12.3 11.4
Investment return (before tax) - balanced portfolio (2) 11.5 12.2 11.4
Expense inflation base rate (3) 7.5 8.3 7.4
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
31.12.2016 31.12.2015 30.06.2016
% % %
Cannon Assurance 33.7 33.7 33.7
Eris Property Group 23.7 23.7 23.7
Metropolitan Health Ghana 0.9 0.9 0.9
Metropolitan Health Group 17.6 17.6 17.6
Metropolitan Health Namibia Administrators 49.0 49.0 49.0
Metropolitan Kenya 33.7 33.7 33.7
Metropolitan Nigeria - 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 9.9 10.3 10.3
Momentum Mozambique 33.0 33.0 33.0
Momentum Swaziland 33.0 33.0 33.0
BUSINESS COMBINATIONS - DECEMBER 2016
There were no significant business combinations for the 6 months ended December 2016.
BUSINESS COMBINATIONS - JUNE 2016
There were no significant business combinations for the 12 months ended June 2016.
RECONCILIATION OF GOODWILL
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Balance at beginning 1 237 1 333 1 333
Impairment charges (1) (52) - (104)
Exchange differences (20) 35 8
Balance at end 1 165 1 368 1 237
1. Goodwill relating to the Cannon (International segment) acquisition was impaired by R52 million (31.12.2015: Rnil; 30.06.2016: R41 million). Goodwill of
R63 million relating to Hello Doctor (International and Corporate and Public Sector segment) was also impaired in June 2016.
SEGMENTAL INFORMATION
6 mths to 31.12.2016 Segmental
Momentum Retail Metropolitan Retail Corporate and Public Sector International Shareholder Capital total Reconciling items (1) IFRS total
Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
Net insurance premiums 12 018 3 521 13 257 2 054 - 30 850 (16 778) 14 072
Recurring premiums 4 716 2 996 7 960 1 759 - 17 431 (4 517) 12 914
Single premiums 7 302 525 5 297 295 - 13 419 (12 261) 1 158
Fee income 1 986 37 2 026 404 15 4 468 (617) 3 851
Fee income 1 686 37 1 813 384 11 3 931 (80) 3 851
Intergroup fee income 300 - 213 20 4 537 (537) -
Expenses
Net payments to contract holders
External payments 11 845 2 724 12 158 1 228 - 27 955 (15 714) 12 241
Other expenses 3 096 1 152 2 623 1 166 (12) 8 025 1 653 9 678
Sales remuneration 1 133 549 774 311 - 2 767 (4) 2 763
Administration expenses 1 291 593 1 394 731 134 4 143 342 4 485
Amortisation due to business
combinations and impairments - - 6 - 18 24 378 402
Cell captive business - - 88 - - 88 867 955
Direct property expenses - - - - - - 221 221
Asset management and other
fee expenses 315 - 107 7 5 434 386 820
Holding company expenses - - - - 32 32 - 32
Intergroup expenses 357 10 254 117 (201) 537 (537) -
Diluted core headline earnings 649 373 280 (61) 357 1 598 - 1 598
Operating profit 903 520 323 (38) 64 1 772 - 1 772
Tax on operating profit (280) (148) (90) (38) (44) (600) - (600)
Investment income 35 1 65 22 413 536 - 536
Tax on investment income (9) - (18) (7) (76) (110) - (110)
Covered 730 384 103 82 364 1 663 - 1 663
Non-covered (81) (11) 177 (143) (7) (65) - (65)
649 373 280 (61) 357 1 598 - 1 598
Actuarial liabilities 198 054 32 549 121 734 12 687 2 508 367 532 - 367 532
1. The 'Reconciling items' column includes: investment contract business premiums and claims; intergroup fee income and expenses; non-recurring items included in administration
expenses; direct property and asset management fees for all entities, except non-life entities, 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 Segmental
6 mths to 31.12.2015 Momentum Retail Metropolitan Retail Corporate and Public Sector International Shareholder Capital total Reconciling items (1) IFRS total
Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
Net insurance premiums 12 642 3 645 13 661 2 103 - 32 051 (17 907) 14 144
Recurring premiums 4 575 2 991 7 494 1 774 - 16 834 (4 237) 12 597
Single premiums 8 067 654 6 167 329 - 15 217 (13 670) 1 547
Fee income 1 862 43 2 304 367 34 4 610 (820) 3 790
Fee income 1 551 40 2 043 309 3 3 946 (156) 3 790
Intergroup fee income 311 3 261 58 31 664 (664) -
Expenses
Net payments to contract holders
External payments 12 386 3 232 15 339 1 362 - 32 319 (19 273) 13 046
Other expenses 3 036 1 072 2 758 1 151 5 8 022 1 081 9 103
Sales remuneration 1 125 515 734 338 - 2 712 (5) 2 707
Administration expenses 1 246 541 1 562 636 106 4 091 318 4 409
Amortisation due to business
combinations and impairments - - 6 - 45 51 453 504
Cell captive business - - 94 - - 94 515 609
Direct property expenses - - - - - - 211 211
Asset management and other
fee expenses 247 - 106 20 11 384 253 637
Holding company expenses - - - - 26 26 - 26
Intergroup expenses 418 16 256 157 (183) 664 (664) -
Diluted core headline earnings 644 316 396 (39) 362 1 679 - 1 679
Operating profit 915 443 504 (60) 97 1 899 - 1 899
Tax on operating profit (300) (127) (142) 5 (57) (621) - (621)
Investment income 35 - 52 18 380 485 - 485
Tax on investment income (6) - (18) (2) (58) (84) - (84)
Covered 753 325 180 109 438 1 805 - 1 805
Non-covered (109) (9) 216 (148) (76) (126) - (126)
644 316 396 (39) 362 1 679 - 1 679
Actuarial liabilities 196 193 32 296 120 266 12 091 2 946 363 792 - 363 792
1. The 'Reconciling items' column includes: investment contract business premiums and claims; intergroup fee income and expenses; non-recurring items included in administration
expenses; direct property and asset management fees for all entities, except non-life entities, 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 Segmental
12 mths to 30.06.2016 Momentum Retail Metropolitan Retail Corporate and Public Sector International Shareholder Capital total Reconciling items (1) IFRS total
Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
Net insurance premiums 25 634 6 816 26 608 4 054 - 63 112 (34 141) 28 971
Recurring premiums 9 278 5 558 15 170 3 322 - 33 328 (8 720) 24 608
Single premiums 16 356 1 258 11 438 732 - 29 784 (25 421) 4 363
Fee income 3 555 209 4 940 773 96 9 573 (1 894) 7 679
Fee income 2 992 179 4 203 664 19 8 057 (378) 7 679
Intergroup fee income 563 30 737 109 77 1 516 (1 516) -
Expenses
Net payments to contract holders
External payments 24 846 6 037 30 568 2 513 - 63 964 (37 355) 26 609
Other expenses 5 907 2 293 6 309 2 348 121 16 978 1 770 18 748
Sales remuneration 2 154 967 1 537 653 - 5 311 (7) 5 304
Administration expenses 2 804 1 158 3 385 1 391 256 8 994 443 9 437
Amortisation due to business
combinations and impairments - - 12 - 72 84 823 907
Cell captive business - - 203 - - 203 1 178 1 381
Direct property expenses - - - - - - 317 317
Asset management and other
fee expenses 248 103 437 26 2 816 532 1 348
Holding company expenses - - - - 54 54 - 54
Intergroup expenses 701 65 735 278 (263) 1 516 (1 516) -
Diluted core headline earnings 1 466 700 692 (156) 504 3 206 - 3 206
Operating profit 2 029 972 857 (151) (137) 3 570 - 3 570
Tax on operating profit (619) (272) (246) (26) (23) (1 186) - (1 186)
Investment income 72 - 111 25 850 1 058 - 1 058
Tax on investment income (16) - (30) (4) (186) (236) - (236)
Covered 1 577 723 291 185 631 3 407 - 3 407
Non-covered (111) (23) 401 (341) (127) (201) - (201)
1 466 700 692 (156) 504 3 206 - 3 206
Actuarial liabilities 201 066 32 942 123 065 12 438 2 567 372 078 - 372 078
1. The 'Reconciling items' column includes: investment contract business premiums and claims; intergroup fee income and expenses; non-recurring items included in administration
expenses; direct property and asset management fees for all entities, except non-life entities, 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.
CHANGE IN DILUTED CORE HEADLINE EARNINGS
Restated Restated
Change 6 mths to 6 mths to 12 mths to
% 31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Momentum Retail 1 649 644 1 466
Metropolitan Retail 18 373 316 700
Corporate and Public Sector (29) 280 396 692
International (56) (61) (39) (156)
Operating segments (6) 1 241 1 317 2 702
Shareholder Capital (1) 357 362 504
Total diluted core headline earnings (5) 1 598 1 679 3 206
INVESTMENTS AND SAVINGS CENTRE OF EXCELLENCE - NON-COVERED BUSINESS
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Revenue 1 178 1 087 2 270
Fee income 737 725 1 488
Intergroup fees 354 349 677
Investment income 53 49 111
Fair value gains/(losses) 34 (36) (6)
Expenses and finance costs (1 064) (954) (1 962)
Fair value adjustments on investment contracts (39) 36 41
Other expenses (997) (962) (1 945)
Finance costs (28) (28) (58)
Share of profit of associates 20 3 13
Non-controlling interest (9) (9) (18)
Profit before tax 125 127 303
Tax (27) (15) (78)
Core earnings 98 112 225
Operating profit before tax 102 107 251
Tax on operating profit (21) (8) (66)
Net operating profit 81 99 185
Investment income 23 20 52
Tax on investment income (6) (7) (12)
Diluted core headline earnings 98 112 225
Net operating profit allocated per segment:
Momentum Retail 36 42 98
Corporate and Public Sector 26 41 102
International 19 15 (14)
Shareholder Capital - 1 (1)
81 99 185
HEALTH CENTRE OF EXCELLENCE - NON-COVERED BUSINESS
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Revenue 1 238 1 322 2 522
Net insurance premiums 295 319 566
Fee income 878 987 1 889
Intergroup fees 47 2 32
Investment income 18 14 35
Expenses (1 192) (1 211) (2 355)
Net payments to contract holders (212) (238) (427)
Other expenses (979) (973) (1 926)
Finance costs (1) - (2)
Profit before tax 46 111 167
Tax (11) (48) (44)
Earnings 35 63 123
Dilutory effect of subsidiaries (3) (8) (9)
Diluted core headline earnings 32 55 114
Operating profit before tax 24 88 125
Tax on operating profit (6) (42) (36)
Net operating profit 18 46 89
Investment income 19 15 33
Tax on investment income (5) (6) (8)
Diluted core headline earnings 32 55 114
Net operating profit allocated per segment:
Momentum Retail (31) (53) (50)
Corporate and Public Sector 49 99 139
18 46 89
Closed schemes 45 66 102
Open scheme (42) (51) (46)
Other 15 31 33
18 46 89
Principal number of members:
Closed schemes 845 311 1 106 028 830 548
Open schemes 145 632 136 263 143 462
990 943 1 242 291 974 010
Allocated per segment:
Momentum Retail 97 752 88 021 95 888
Corporate and Public Sector 893 191 1 154 270 878 122
990 943 1 242 291 974 010
RECONCILIATION OF GUARDRISK (PROMOTER CELL (1))
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Revenue by type 312 240 527
Management fees 214 204 405
Investment fees 36 30 62
Underwriting profit/(loss) 18 (26) (6)
Other income - 1 2
Investment income 44 31 64
Expenses and finance costs (187) (158) (334)
Administration expenses (182) (152) (323)
Finance costs (5) (6) (11)
Earnings before tax 125 82 193
Tax attributable to promoter operating profit (34) (18) (50)
Diluted core headline earnings - non-covered (2) 91 64 143
Operating profit before tax 81 51 129
Tax on operating profit (22) (9) (32)
Net operating profit 59 42 97
Investment income 44 31 64
Tax on investment income (12) (9) (18)
Diluted core headline earnings 91 64 143
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.
2. Guardrisk Life Ltd has been transferred to non-covered business in the current period. Prior periods have been restated.
MOMENTUM SHORT-TERM INSURANCE
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Revenue 321 306 617
Net insurance premiums 296 286 571
Fee income 11 8 21
Investment income 14 12 25
Expenses (418) (433) (822)
Net payments to contract holders (233) (243) (466)
Other expenses (185) (190) (356)
Loss before tax (97) (127) (205)
Tax 16 23 39
Earnings (81) (104) (166)
Operating loss before tax (106) (140) (223)
Tax on operating loss 19 27 44
Net operating loss (87) (113) (179)
Investment income 9 12 18
Tax on investment income (3) (3) (5)
Diluted core headline earnings (81) (104) (166)
Net operating loss allocated per segment:
Momentum Retail (77) (107) (164)
Metropolitan Retail (2) (2) (6)
International (8) (4) (9)
(87) (113) (179)
Momentum Short-term Insurance (65) (94) (137)
MMI Short-term Insurance Administration (22) (19) (42)
(87) (113) (179)
SEGMENT BY CENTRE OF EXCELLENCE
Corporate and
Momentum Retail Metropolitan Retail Public Sector International Shareholder Capital Total
Rm Rm Rm Rm Rm Rm
6 mths to 31.12.2016
Covered
Operating profit 730 383 101 82 47 1 343
Investment income - 1 2 - 317 320
Total 730 384 103 82 364 1 663
Non-covered
Investment and savings 36 - 26 19 - 81
Life insurance - - - (42) - (42)
Health (31) - 49 (6) - 12
Short-term insurance (77) (2) 59 (46) - (66)
Client engagement (35) (9) (12) (12) 5 (63)
Unallocated expenses - - - - (63) (63)
Net investment income 26 - 45 15 20 106
Other operations - - 10 (71) 31 (30)
Total (81) (11) 177 (143) (7) (65)
Core earnings 649 373 280 (61) 357 1 598
6 mths to 31.12.2015
Covered
Operating profit 753 325 178 109 129 1 494
Investment income - - 2 - 309 311
Total 753 325 180 109 438 1 805
Non-covered
Investment and savings 42 - 41 15 1 99
Life insurance - - - (19) - (19)
Health (53) - 99 (51) - (5)
Short-term insurance (107) (2) 42 (35) - (102)
Client engagement (20) (7) (10) (10) 10 (37)
Unallocated expenses - - - - (62) (62)
Net investment income 29 - 32 16 13 90
Other - - 12 (64) (38) (90)
Total (109) (9) 216 (148) (76) (126)
Core earnings 644 316 396 (39) 362 1 679
Restated
12 mths to 30.06.2016
Covered
Operating profit 1 577 723 287 185 (28) 2 744
Investment income - - 4 - 659 663
Total 1 577 723 291 185 631 3 407
Non-covered
Investment and savings 98 - 102 (14) (1) 185
Life insurance - - - (68) - (68)
Health (50) - 139 (63) - 26
Short-term insurance (164) (6) 97 (89) - (162)
Client engagement (53) (17) (22) (23) 17 (98)
Unallocated expenses - - - - (102) (102)
Net investment income 56 - 77 21 5 159
Other operations 2 - 8 (105) (46) (141)
Total (111) (23) 401 (341) (127) (201)
Core earnings 1 466 700 692 (156) 504 3 206
STATUTORY EXCESS
STATUTORY EXCESS
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Group excess per reporting basis 23 543 24 838 24 109
Net assets - other businesses (2 984) (3 413) (2 939)
Fair value adjustments on Metropolitan business acquisition and other consolidation adjustments (3 284) (3 618) (3 471)
Excess - long-term insurance business, net of non-controlling interests (1) 17 275 17 807 17 699
Disregarded assets (2) (969) (996) (983)
Difference between statutory and published valuation methods (597) (846) (582)
Write-down of subsidiaries and associates for statutory purposes (1 347) (1 352) (1 246)
Unsecured subordinated debt 3 553 3 459 3 557
Consolidation adjustments (37) (39) (53)
Statutory excess - long-term insurance business 17 878 18 033 18 392
Capital adequacy requirement (CAR) (Rm) (3) 6 560 6 456 6 238
Ratio of long-term insurance business excess to CAR (times) 2.7 2.8 2.9
Discretionary margins 12 753 12 759 12 702
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), as well as the other non-life insurance entities, including
African health operations. 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 R477 million (31.12.2015: R504 million; 30.06.2016: R491 million).
3. Aggregation of separate company's capital adequacy requirements (CARs), with no assumption of diversification benefits.
EMBEDDED VALUE INFORMATION
EMBEDDED VALUE RESULTS AS AT
Restated Restated
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Covered business
Reporting excess - long-term insurance business 17 275 17 807 17 699
Reclassification to non-covered business (2 010) (1 999) (1 897)
15 265 15 808 15 802
Disregarded assets (1) (517) (544) (531)
Difference between statutory and published valuation methods (553) (841) (575)
Dilutory effect of subsidiaries (2) (50) (39) (51)
Consolidation adjustments (3) (24) (32) (40)
Value of MMI Group Ltd preference shares issued (500) (500) (500)
Diluted adjusted net worth - covered business 13 621 13 852 14 105
Net value of in-force business 20 542 20 863 20 862
Diluted embedded value - covered business 34 163 34 715 34 967
Non-covered business
Net assets - non-covered business within life insurance companies 2 010 1 999 1 897
Net assets - non-covered business outside life insurance companies 2 984 3 413 2 939
Consolidation adjustments and transfers to covered business (3) (2 639) (3 240) (2 776)
Adjustments for dilution (4) 676 783 690
Diluted adjusted net worth - non-covered business 3 031 2 955 2 750
Write-up to directors' value 5 281 2 506 5 272
Non-covered business 6 388 4 604 6 379
Holding company expenses (5) (557) (1 578) (557)
International holding company expenses (5) (550) (520) (550)
Diluted embedded value - non-covered business 8 312 5 461 8 022
Diluted adjusted net worth 16 652 16 807 16 855
Net value of in-force business 20 542 20 863 20 862
Write-up to directors' value 5 281 2 506 5 272
Diluted embedded value 42 475 40 176 42 989
Required capital - covered business (adjusted for qualifying debt) (6) 6 317 6 190 6 098
Surplus capital - covered business 7 304 7 662 8 007
Diluted embedded value per share (cents) 2 648 2 505 2 680
Diluted adjusted net worth per share (cents) 1 038 1 048 1 051
Diluted number of shares in issue (million) (7) 1 604 1 604 1 604
1. Disregarded assets include Sage intangible assets of R477 million (31.12.2015: R504 million; 30.06.2016: R491 million), goodwill and various other items.
2. 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.
3. Consolidation adjustments include mainly goodwill and intangibles in subsidiaries that are eliminated.
4. Adjustments for dilution are made up as follows:
- Dilutory effect of subsidiaries (note 3): R122 million (31.12.2015: R116 million; 30.06.2016: R123 million)
- Treasury shares held on behalf of contract holders: R286 million (31.12.2015: R384 million; 30.06.2016: R292 million)
- Liability - MMI Holdings Ltd convertible preference shares issued to KTH: R268 million (31.12.2015: R283 million; 30.06.2016: R275 million)
5. 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.
6. The required capital for covered business amounts to R9 870 million (31.12.2015: R9 716 million; 30.06.2016: R9 655 million) and is adjusted for qualifying debt of
R3 553 million (31.12.2015: R3 526 million; 30.06.2016: R3 557 million).
7. 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
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Momentum Retail 11 207 11 246 11 409
Gross value of in-force business 12 522 12 501 12 803
Less cost of required capital (1 315) (1 255) (1 394)
Metropolitan Retail 3 543 3 364 3 692
Gross value of in-force business 4 282 4 079 4 376
Less cost of required capital (739) (715) (684)
Corporate and Public Sector (1) 3 607 4 106 3 681
Gross value of in-force business 4 296 4 810 4 390
Less cost of required capital (689) (704) (709)
International (2) 2 147 2 065 2 011
Gross value of in-force business 2 352 2 246 2 226
Less cost of required capital (205) (181) (215)
Shareholder Capital 38 82 69
Gross value of in-force business 38 82 69
Less cost of required capital - - -
Net value of in-force business 20 542 20 863 20 862
1. Prior periods have been restated to exclude Guardrisk Life Ltd from the Corporate and Public Sector.
2. Prior periods have been restated to exclude International life and health entities not yet at operating scale.
EMBEDDED VALUE PER DIVISION
Adjusted Net value of Restated Restated
net worth in-force 31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm Rm Rm
Covered business
MMI Group Ltd business 11 899 18 395 30 294 31 034 31 199
International businesses 1 722 2 147 3 869 3 681 3 768
Namibia 759 1 455 2 214 1 990 2 158
Botswana 435 237 672 678 676
Lesotho 413 410 823 838 758
Other (1) 115 45 160 175 176
Total covered business 13 621 20 542 34 163 34 715 34 967
Adjusted Write-up to Restated Restated
net worth directors' value 31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm Rm Rm
Non-covered business
Investment businesses (2) 669 1 818 2 487 2 118 2 528
Health businesses (3) 278 1 386 1 664 1 302 1 406
Momentum Wealth (3) 110 251 361 394 503
Guardrisk (3,4) 804 1 858 2 662 2 313 2 570
Momentum Short-term Insurance 468 111 579 502 527
International 79 414 493 565 822
United Kingdom businesses (5) 209 564 773 714 840
Other businesses (1,6) (130) (150) (280) (149) (18)
MMI Holdings (after consolidation adjustments) (6) 623 (557) 66 (1 733) (334)
Total non-covered business 3 031 5 281 8 312 5 461 8 022
Total embedded value 16 652 25 823 42 475 40 176 42 989
Diluted net asset value - non-covered business (3 031)
Adjustments to covered business - net asset value 3 654
Reporting excess - long-term insurance business 17 275
1. On 1 July 2015 African life and health entities not yet at operating scale were transferred to non-covered business (31.12.2015: adjusted net worth of R371 million and value
of in-force of R99 million; 30.06.2016: adjusted net worth of R466 million and value of in-force of R146 million). The December 2015 and June 2016 comparatives have been
restated to reflect the transfer.
2. The material Investment businesses are valued using a discounted cash flow methodology applied to projections of future earnings.
3. The Health businesses, Momentum Wealth and Guardrisk are valued using embedded value methodology.
4. On 1 July 2015 Guardrisk Life Ltd was transferred to non-covered business (31.12.2015: adjusted net worth of R149 million and value of in-force of R645 million; 30.06.2016:
adjusted net worth of R169 million and value of in-force of R660 million). The December 2015 and June 2016 comparatives have been restated to reflect the transfer.
5. This includes MMI non-covered subsidiaries domiciled in the United Kingdom and related territories.
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 Restated
6 mths to 6 mths to 12 mths to
Covered business 31.12.2016 31.12.2015 30.06.2016
Notes Adjusted net Gross value of Cost of
worth (ANW) in-force (VIF) CAR Total EV Total EV Total EV
Rm Rm Rm Rm Rm Rm
Profit from new business (769) 1 179 (93) 317 323 805
Embedded value from new business A (769) 1 154 (93) 292 301 712
Expected return to end of period B - 25 - 25 22 93
Profit from existing business 2 070 (769) 52 1 353 1 238 1 703
Expected return - unwinding of RDR B - 1 319 (163) 1 156 1 091 2 260
Release from the cost of required capital C - - 181 181 225 450
Expected (or actual) net of tax profit transfer to net worth D 2 036 (2 036) - - - -
Operating experience variances E 93 (13) 34 114 119 73
Development expenses F (17) - - (17) (53) (99)
Operating assumption changes G (42) (39) - (81) (144) (981)
Embedded value profit from operations 1 301 410 (41) 1 670 1 561 2 508
Investment return on adjusted net worth H 310 - - 310 282 823
Investment variances I (85) (715) 69 (731) 207 (126)
Economic assumption changes J 3 (54) 22 (29) (564) (124)
Exchange rate movements K (22) (15) 4 (33) 74 53
Embedded value profit - covered business 1 507 (374) 54 1 187 1 560 3 134
Transfer of business to non-covered business L (298) - - (298) (1 172) (1 333)
Changes in share capital M (28) - - (28) (2) 4
Dividend paid (1 665) - - (1 665) (1 671) (2 838)
Change in embedded value - covered business (484) (374) 54 (804) (1 285) (1 033)
Non-covered business
Change in directors' valuation and other items (238) (213) 1 080
Holding company expenses - (30) 961
Embedded value profit - non-covered business (238) (243) 2 041
Changes in share capital M 28 2 (4)
Dividend paid 222 221 363
Finance costs - preference shares (20) (21) (41)
Transfer of business from covered business L 298 1 172 1 333
Change in embedded value - non-covered business 290 1 131 3 692
Total change in group embedded value (514) (154) 2 659
Total embedded value profit 949 1 317 5 175
Return on embedded value (%) - internal rate of return 4.5% 6.6% 12.8%
A. VALUE OF NEW BUSINESS
VALUE OF NEW BUSINESS Corporate and
Momentum Retail Metropolitan Retail Public Sector (1) International (2) Total
Rm Rm Rm Rm Rm
6 mths to 31.12.2016
Value of new business 110 94 42 46 292
Gross 147 125 61 52 385
Less cost of required capital (37) (31) (19) (6) (93)
New business premiums 8 766 1 218 2 224 421 12 629
Recurring premiums 638 649 320 239 1 846
Single premiums 8 128 569 1 904 182 10 783
New business premiums (APE) 1 451 706 510 257 2 924
New business premiums (PVP) 12 114 2 673 5 094 1 414 21 295
Profitability of new business as a percentage of APE 7.6 13.3 8.2 17.9 10.0
Profitability of new business as a percentage of PVP 0.9 3.5 0.8 3.3 1.4
Restated
6 mths to 31.12.2015
Value of new business 126 68 76 31 301
Gross 163 92 90 38 383
Less cost of required capital (37) (24) (14) (7) (82)
New business premiums 9 690 1 171 2 642 391 13 894
Recurring premiums 627 530 223 188 1 568
Single premiums 9 063 641 2 419 203 12 326
New business premiums (APE) 1 533 594 465 208 2 800
New business premiums (PVP) 12 673 2 411 4 530 1 175 20 789
Profitability of new business as a percentage of APE 8.2 11.4 16.3 14.9 10.8
Profitability of new business as a percentage of PVP 1.0 2.8 1.7 2.6 1.4
Restated
12 mths to 30.06.2016
Value of new business 290 191 160 71 712
Gross 362 244 196 83 885
Less cost of required capital (72) (53) (36) (12) (173)
New business premiums 19 365 2 343 5 367 841 27 916
Recurring premiums 1 292 1 087 706 400 3 485
Single premiums 18 073 1 256 4 661 441 24 431
New business premiums (APE) 3 099 1 213 1 172 444 5 928
New business premiums (PVP) 25 950 4 936 10 750 2 454 44 090
Profitability of new business as a percentage of APE 9.4 15.7 13.7 16.0 12.0
Profitability of new business as a percentage of PVP 1.1 3.9 1.5 2.9 1.6
1. Value of new business have been restated to exclude Guardrisk Life Ltd that was transferred to non-covered business.
2. Value of new business have been restated to exclude the African entities not yet at operating scale that were transferred to non-covered business.
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
Metropolitan Corporate and
Momentum Retail Retail Public Sector (1) International (2) Total
Rm Rm Rm Rm Rm
6 mths to 31.12.2016
New business premiums 8 766 1 218 2 224 421 12 629
Recurring premiums 638 649 320 239 1 846
Risk 288 434 136 - 858
Savings/Investments 350 215 184 - 749
International - - - 239 239
Single premiums 8 128 569 1 904 182 10 783
Savings/Investments 7 669 209 1 360 - 9 238
Annuities 459 360 544 - 1 363
International - - - 182 182
New business premiums (APE) 1 451 706 510 257 2 924
Risk 288 434 136 - 858
Savings/Investments 1 117 236 320 - 1 673
Annuities 46 36 54 - 136
International - - - 257 257
Restated
6 mths to 31.12.2015
New business premiums 9 690 1 171 2 642 391 13 894
Recurring premiums 627 530 223 188 1 568
Risk 288 339 99 - 726
Savings/Investments 339 191 124 - 654
International - - - 188 188
Single premiums 9 063 641 2 419 203 12 326
Savings/Investments 8 672 145 1 736 - 10 553
Annuities 391 496 683 - 1 570
International - - - 203 203
New business premiums (APE) 1 533 594 465 208 2 800
Risk 288 339 99 - 726
Savings/Investments 1 206 205 298 - 1 709
Annuities 39 50 68 - 157
International - - - 208 208
Restated
12 mths to 30.06.2016
New business premiums 19 365 2 343 5 367 841 27 916
Recurring premiums 1 292 1 087 706 400 3 485
Risk 560 703 390 - 1 653
Savings/Investments 732 384 315 - 1 431
Annuities - - 1 - 1
International - - - 400 400
Single premiums 18 073 1 256 4 661 441 24 431
Savings/Investments 17 091 312 3 499 - 20 902
Annuities 982 944 1 162 - 3 088
International - - - 441 441
New business premiums (APE) 3 099 1 213 1 172 444 5 928
Risk 560 704 390 - 1 654
Savings/Investments 2 441 415 665 - 3 521
Annuities 98 94 117 - 309
International - - - 444 444
1. Value of new business have been restated to exclude Guardrisk Life Ltd that was transferred to non-covered business.
2. Value of new business have been restated to exclude the African entities not yet at operating scale that were transferred to non-covered business.
RECONCILIATION OF LUMP SUM INFLOWS
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Total lump sum inflows 13 419 15 217 29 784
Inflows not included in value of new business (3 344) (3 597) (6 853)
Term extensions on maturing policies 227 198 342
Retirement annuity proceeds invested in living annuities 497 518 1 008
Non-controlling interests and other adjustments (16) (10) 150
Single premiums included in value of new business 10 783 12 326 24 431
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. The expected return on new business 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
Restated Restated
6 mths to 31.12.2016 6 mths to 12 mths to
31.12.2015 30.06.2016
OPERATING EXPERIENCE VARIANCES Notes ANW Net VIF EV EV EV
Rm Rm Rm Rm Rm
Momentum Retail 65 (4) 61 33 233
Mortality and morbidity 1 97 7 104 71 230
Terminations, premium cessations and policy alterations 2 (73) 105 32 (77) 11
Expense variance 3 35 - 35 (14) (52)
Credit risk variance 3 - 3 24 20
Other 4 3 (116) (113) 29 24
Metropolitan Retail 88 (2) 86 61 123
Mortality and morbidity 1 40 - 40 28 88
Terminations, premium cessations and policy alterations (8) (3) (11) 37 10
Expense variance 3 42 - 42 (1) (9)
Credit risk variance 5 - 5 6 10
Other 9 1 10 (9) 24
Corporate and Public Sector (106) (39) (145) (90) (228)
Mortality and morbidity 5 (152) 1 (151) (92) (230)
Terminations 6 8 (32) (24) (43) (59)
Expense variance 6 - 6 (30) (94)
Credit risk variance 16 - 16 14 40
FNB Life - share of profits - - - 17 37
Other 16 (8) 8 44 78
International 3 49 52 40 59
Mortality and morbidity 1 17 17 34 47 73
Terminations, premium cessations and policy alterations - - - (11) (22)
Expense variance (21) 27 6 2 5
Other 7 5 12 2 3
Shareholder Capital 43 (17) 26 103 (71)
Opportunity cost of required capital - 34 34 (28) (43)
Total operating experience variances 93 21 114 119 73
Notes
1. Overall, mortality and morbidity experience for the 6 months were better compared to what was allowed for in the valuation basis.
2. Better than expected experience on voluntary premium increases.
3. The impact of managing expenses better than anticipated in the actuarial valuation basis.
4. One off impact arising from improved modelling of rider benefits.
5. The negative variance is a result of disability-in-payment experience.
6. Lower than expected growth on risk business.
F. DEVELOPMENT EXPENSES
Business development expenses within Momentum Retail and Metropolitan Retail.
G. OPERATING ASSUMPTION CHANGES
Restated Restated
6 mths to 31.12.2016 6 mths to 12 mths to
31.12.2015 30.06.2016
ANW Net VIF EV EV EV
OPERATING ASSUMPTION CHANGES Notes Rm Rm Rm Rm Rm
Momentum Retail (41) 19 (22) (15) (126)
Mortality and morbidity assumptions - - - - 24
Termination assumptions - - - - 32
Renewal expense assumptions 1 - 26 26 (5) 94
Holding company expenses - - - - (325)
Modelling, methodology and other changes 2 (41) (7) (48) (10) 49
Metropolitan Retail - (7) (7) 6 82
Mortality and morbidity assumptions - - - - 271
Termination assumptions - - - - (30)
Renewal expense assumptions - - - - (46)
Holding company expenses - - - - (345)
Modelling, methodology and other changes 2 - (7) (7) 6 232
Corporate and Public Sector - (55) (55) (93) (678)
Mortality and morbidity assumptions - - - - (41)
Termination assumptions - - - - (1)
Renewal expense assumptions 3 - (55) (55) (98) (190)
Holding company expenses - - - - (225)
Modelling, methodology and other changes - - - 5 (221)
International (1) 4 3 (42) (147)
Mortality and morbidity assumptions - - - (1) 52
Termination assumptions - - - - (25)
Renewal expense assumptions - 2 2 (3) (21)
Modelling, methodology and other changes (1) 2 1 (38) (153)
Shareholder Capital - - - - (47)
Methodology change: cost of required capital - - - - (65)
Total operating assumption changes (42) (39) (81) (144) (981)
Notes
1. Good sales volumes on expense recoveries on group small schemes.
2. Allowance for improvement in client value-for-money.
3. Lower than expected sales volumes on expense recoveries.
H. INVESTMENT RETURN ON ADJUSTED NET WORTH
INVESTMENT RETURN ON ADJUSTED NET WORTH
Restated Restated
6 mths to 6 mths to 12 mths to
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Investment income 313 249 614
Capital appreciation and other 15 49 242
Preference share dividends paid and change in fair value of preference shares (18) (16) (33)
Investment return on adjusted net worth 310 282 823
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 represents the alignment of the net assets and value of in-force of subsidiaries between covered and non-covered business.
M. CHANGES IN SHARE CAPITAL
Changes in share capital include the recapitalisation of some of the International subsidiaries.
COVERED BUSINESS: SENSITIVITIES - 31.12.2016
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 13 621 20 542 23 490 (2 948) 292 385 (93)
1% increase in risk discount rate 18 856 22 171 (3 315) 219 319 (100)
% change (8) (6) 12 (25) (17) 8
1% reduction in risk discount rate 22 461 24 994 (2 533) 376 460 (84)
% change 9 6 (14) 29 19 (10)
10% decrease in future expenses 21 854 24 802 (2 948) 356 449 (93)
% change (1) 6 6 - 22 17 -
10% decrease in lapse, paid-up and surrender rates 21 318 24 268 (2 950) 372 472 (100)
% change 4 3 - 27 23 8
5% decrease in mortality and morbidity for assurance business 22 149 25 124 (2 975) 363 456 (93)
% change 8 7 1 24 18 -
5% decrease in mortality for annuity business 20 225 23 144 (2 919) 286 379 (93)
% change (2) (1) (1) (2) (2) -
1% reduction in gross investment return, inflation rate and risk discount rate 13 631 21 198 24 102 (2 904) 335 428 (93)
% change (2) - 3 3 (1) 15 11 -
1% reduction in inflation rate 21 337 24 285 (2 948) 332 425 (93)
% change 4 3 - 14 10 -
10% fall in market value of equities and properties 13 279 19 553 22 440 (2 887)
% change (3) (5) (4) (2)
10% reduction in premium indexation take-up rate 20 228 23 168 (2 940) 273 366 (93)
% change (2) (1) - (7) (5) -
10% decrease in non-commission related acquisition expenses 346 439 (93)
% change 18 14 -
1% increase in equity/property risk premium 21 122 24 064 (2 942) 313 406 (93)
% change 3 2 - 7 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.
ADDITIONAL INFORMATION
ANALYSIS OF ASSETS MANAGED AND/OR ADMINISTERED (1) Restated Restated
31.12.2016 31.12.2015 30.06.2016
Rm Rm Rm
Managed and/or administered by Investments
Financial assets 405 095 431 886 442 582
Momentum Manager of Managers (2) 85 359 81 580 83 703
Momentum Investment Consultants 10 109 10 343 10 327
Momentum Collective Investments 60 419 62 067 62 201
Metropolitan Collective Investments 31 573 37 034 39 847
Momentum Asset Management (3) 154 695 177 376 184 389
Momentum Global Investments 56 323 57 161 55 228
Momentum Alternative Investments 6 617 6 325 6 887
Properties - Eris Property Group 19 236 28 782 27 346
On-balance sheet 8 605 8 459 8 534
Off-balance sheet 10 631 20 323 18 812
Momentum Wealth linked product assets under administration 148 793 152 439 153 730
On-balance sheet 94 839 95 329 96 858
Off-balance sheet 53 954 57 110 56 872
Managed internally or by other managers within MMI (on-balance sheet) 63 369 68 867 64 597
Managed by external managers (on-balance sheet) 15 152 16 754 16 605
Properties managed internally or by other managers within MMI or externally 2 452 2 445 2 657
Corporate and Public Sector - segregated assets - 210 216
Corporate and Public Sector - cell captives on-balance sheet 18 302 17 821 17 834
Total assets managed and/or administered 672 399 719 204 725 567
Managed and/or administered by Investments
On-balance sheet 224 227 226 876 225 396
Off-balance sheet 180 868 205 010 217 186
405 095 431 886 442 582
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. Recent operating model changes in the Investment business has resulted in the consolidation of asset administration agreements between entities resulting in a decrease in
assets under administration with no impact on earnings.
3. In the June 2016 period, MMI performed certain administrative functions for Aluwani Capital Partners (Aluwani) on an arms-length basis. This resulted in R36 billion being
included in Momentum Asset Management which was managed by Aluwani. R28 billion of these assets was disinvested in the current period.
NET FUNDS RECEIVED FROM CLIENTS (1)
Gross single Gross recurring Gross Gross Net inflow/
inflows inflows inflow outflow (outflow)
Rm Rm Rm Rm Rm
6 mths to 31.12.2016
Momentum Retail 7 302 4 716 12 018 (11 845) 173
Metropolitan Retail 525 2 996 3 521 (2 724) 797
Corporate and Public Sector 5 297 7 960 13 257 (12 158) 1 099
International 295 1 759 2 054 (1 228) 826
Long-term insurance business fund flows 13 419 17 431 30 850 (27 955) 2 895
Off-balance sheet fund flows
Managed and/or administered by Investments (2) 27 088 (59 370) (32 282)
Properties - Eris Property Group 834 (9 015) (8 181)
Momentum Wealth linked product assets under administration 3 848 (4 888) (1 040)
Corporate and Public Sector - segregated assets - (216) (216)
Total net funds received from clients 62 620 (101 444) (38 824)
Restated
6 mths to 31.12.2015
Momentum Retail 8 067 4 575 12 642 (12 386) 256
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 329 1 774 2 103 (1 362) 741
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
Restated
12 mths to 30.06.2016
Momentum Retail 16 356 9 278 25 634 (24 846) 788
Metropolitan Retail 1 258 5 558 6 816 (6 037) 779
Corporate and Public Sector 11 438 15 170 26 608 (30 568) (3 960)
International 732 3 322 4 054 (2 513) 1 541
Long-term insurance business fund flows 29 784 33 328 63 112 (63 964) (852)
Off-balance sheet fund flows
Managed and/or administered by Investments 84 243 (80 887) 3 356
Properties - Eris Property Group 2 972 (2 227) 745
Momentum Wealth linked product assets under administration 10 450 (10 837) (387)
Corporate and Public Sector - segregated assets 16 - 16
Total net funds received from clients 160 793 (157 915) 2 878
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. Aluwani assets, amounting to R28 billion, were disinvested in the current period.
ANALYSIS OF ASSETS BACKING SHAREHOLDER EXCESS
Restated Restated
31.12.2016 31.12.2015 30.06.2016
Rm % Rm % Rm %
Equity securities 321 1.4 504 2.0 372 1.5
Preference shares 1 585 6.7 1 406 5.7 1 457 6.0
Collective investment schemes 271 1.2 208 0.8 264 1.1
Debt securities 6 032 25.6 5 285 21.3 5 767 23.9
Properties 3 180 13.5 2 891 11.6 3 436 14.3
Owner-occupied properties 1 657 7.0 1 410 5.7 1 662 6.9
Investment properties 1 523 6.5 1 481 6.0 1 774 7.4
Cash and cash equivalents and funds on deposit 7 839 33.3 8 212 33.1 8 488 35.2
Intangible assets 7 646 32.5 8 388 33.8 8 035 33.3
Other net assets 776 3.3 2 137 8.6 414 1.7
27 650 117.4 29 031 116.9 28 233 117.1
Redeemable preference shares (268) (1.1) (283) (1.1) (275) (1.1)
Subordinated redeemable debt (3 553) (15.1) (3 526) (14.2) (3 557) (14.8)
Treasury shares (286) (1.2) (384) (1.5) (292) (1.2)
Shareholder excess per reporting basis 23 543 100.0 24 838 100.0 24 109 100.0
NUMBER OF EMPLOYEES
Restated Restated
31.12.2016 31.12.2015 30.06.2016
Indoor staff 9 683 10 155 10 077
Segments
Momentum Retail 1 163 1 385 1 360
Metropolitan Retail 1 193 1 175 1 215
Corporate and Public Sector 1 007 1 009 1 021
International 1 359 1 250 1 295
Centres of Excellence
Investments and Savings Solutions 485 528 511
Legacy Solutions 219 205 211
Life Insurance Solutions 490 488 487
Health Solutions 2 422 2 682 2 591
Short-term Insurance Solutions 276 289 283
Multiply 170 133 149
Group services divisions 899 1 011 954
Field staff 8 100 6 893 7 483
Momentum Retail 1 165 957 1 111
Metropolitan Retail 5 051 4 148 4 804
International 1 884 1 788 1 568
Total 17 783 17 048 17 560
1. The prior periods have been restated to align to the group's client centric model.
STOCK EXCHANGE PERFORMANCE
31.12.2016 30.06.2016 31.12.2015 30.06.2015
6 month period
Value of listed shares traded (rand million) 9 681 10 914 14 700 11 987
Volume of listed shares traded (million) 413 478 580 381
Shares traded (% of average listed shares in issue) (1) 53 61 74 49
Trade prices
Highest (cents per share) 2 482 2 597 3 149 3 475
Lowest (cents per share) 2 099 1 955 1 900 2 829
Last sale of period (cents per share) 2 359 2 264 2 200 3 015
Annualised percentage (%) change during period 9 6 (47) 1
Annualised percentage (%) change - life insurance sector (J857) (9) (9) (3) 12
Annualised percentage (%) change - top 40 index (J200) (9) 1 (1) 10
31 December/30 June
Price/diluted core headline earnings (segmental) ratio 11.9 11.3 10.5 12.6
Dividend yield % (dividend on listed shares) (1) 2.8 6.9 7.1 5.1
Dividend yield % - top 40 index (J200) (1) 2.8 2.9 3.1 2.9
Total shares issued (million)
Ordinary shares listed on JSE 1 575 1 574 1 573 1 572
Treasury shares held on behalf of contract holders (12) (13) (17) (14)
Basic number of shares in issue 1 563 1 561 1 556 1 558
Treasury shares held on behalf of contract holders 12 13 17 14
Convertible redeemable preference shares 29 30 31 32
Diluted number of shares in issue (2) 1 604 1 604 1 604 1 604
Market capitalisation at end (Rbn) (3) 38 36 35 48
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: 02/03/2017 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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