MMI HOLDINGS LIMITED - MMI Holdings Reset and Grow strategy on track

MMI Holdings Reset and Grow strategy on track

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 Reset and Grow strategy on track

  Commitment to Reset and Grow strategy has positive impact on business results
Johannesburg 8 March, 2019 – MMI Holdings Limited (JSE: MMI) reported steady
growth for the first half of the 2019 financial year at its interim results
announcement today. The Group delivered normalised headline earnings of R1.6bn
for the six months ended 31 December 2018.

In September 2018, MMI Group CEO Hillie Meyer announced a three-year Reset and
Grow turnaround strategy to streamline MMI’s operations, maximise efficiencies
and increase earnings across the Group’s various businesses. Speaking at the
results announcement today, Meyer said that MMI is on track with delivering on
this strategy: “We are satisfied with our progress so far towards our three-year
goal of increasing earnings to between R3.6 billion and R4 billion for the 2021
financial year.” He also announced that dividend payments are to be reinstated
at 35 cents per ordinary share, following the successful completion of a share
buy-back programme.

Amidst a challenging operating environment, which included declining equity
markets and sluggish economic growth, MMI improved both new business flows and
the value of new business materially from the comparative period.

Highlights for the reporting period include:
Earnings
The R1.6 billion of diluted normalised headline earnings represented an increase
of 2% over the prior period. This improvement is due to tight control of
operational expenses, strong underwriting results, and improved earnings from
fixed rate and annuity products.

Diluted normalised headline earnings per share increased by 6% to 105 cents,
benefiting from the impact of the share buy-back programme recently completed.

New business
New business volumes increased by 19% to R28.8 billion. This followed strong
single premium inflows, especially in Momentum Corporate, during the six months.
The value of new business (VNB) increased by 12% to R335 million while net
earned premiums from Momentum Short-term Insurance (MSTI) increased by 19%. MMI
Health showed a 2% increase in medical scheme membership since December 2017.

Embedded value
The Group delivered an annualised return on embedded value per share of 9% over
the six months from 30 June 2018. Embedded value per share increased by 5% to
R26.60 over the six months.

B-BBEE rating
In January MMI announced that it was the first major insurance company to
achieve Level 1 Broad-Based Black Economic Empowerment status under the revised
Financial Sector Code. The rating applies to all companies within the Group,
including the client-facing brands Metropolitan, Momentum, Multiply, Guardrisk,
and Eris Property Group.

Performance of business areas
Momentum Life, Momentum Corporate, MSTI and Guardrisk experienced pleasing
earnings growth. Momentum Life grew normalised headline earnings by 35% to R462
million thanks to favourable risk experience and better than expected take-up of
voluntary premium increases by policyholders. A growing agency sales force and
improved agent productivity resulted in higher new business flows. Momentum
Corporate grew normalised headline earnings by 9% to R319 million, with both the
Employee benefits and the Health business showing earnings growth. MMI’s Non-
life Insurance business grew normalised headline earnings by 29% to R135
million. This growth was bolstered by strong earnings growth for Guardrisk,
which was up 13% on the prior period and improved results from MSTI. Both
Guardrisk and MSTI experienced favourable claims experience during the six
months. Metropolitan Retail’s new business volumes and earnings declined. This
was expected, since the business’s focus was on stabilising the distribution
channel and improving the quality of new business. Good progress has been made
with rolling out country-wide improvements to the Metropolitan branch footprint,
which aims to bolster sales in the long term.

“Given the recent performance of stock markets and the tough economic
environment, we don’t expect these results to be repeated in the next six
months. In fact, a more modest result will be in line with our targets for the
full financial year,” Meyer said. “It is encouraging to witness the commitment
of our employees and to know that there is a renewed sense of purpose at MMI.
This gives me confidence that we will achieve our Reset and Grow target of
generating profits between R3.6 billion and R4 billion by 2021.”

ENDS

Issued on Behalf of MMI holdings by Fleishman Hillard
Media queries, please contact
Arnold Tshimanga - M 074 807 5262 / arnold.tshimanga@fleishman.co.za

8 March 2019

SPONSOR - SOUTH AFRICA: Merrill Lynch South Africa (Pty) Ltd
SPONSOR - NAMIBIA: Simonis Storm Securities (Pty) Ltd

About MMI
MMI Holdings Limited (MMI) is a South African based financial services group
listed on the Johannesburg Stock Exchange in South Africa and on the Namibian
Stock Exchange in Namibia.

Through our client-facing brands Metropolitan and Momentum, with Multiply
(wellness and lifestyle rewards programme), and our other specialist brands,
including Guardrisk and Eris Property Group, MMI enables business and people
from all walks of life to achieve their financial goals and life aspirations.

We help people grow their savings, protect what matters to them and invest for
the future. We help companies and organisations care for and reward their
employees and members. Through our own network of advisers or via independent
brokers and utilising new platforms MMI provides practical financial solutions
for people, communities and businesses.

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