Momentum Group (MTM) Q1 2025 earnings summary

Executive summary

• Impact strategy focused on advice-led, technology-enabled, vertically integrated financial services, with progress in key initiatives and turnaround strategies for Metropolitan Life and Momentum Insure.

• Group started the new strategic cycle with steady performance, satisfactory new business and earnings across most units, and positive direction from year-end results.

• New business sales (present value of new business premiums) increased 5% year-over-year to ZAR 20.7 billion, with strong life annuities and Africa retail/corporate sales.

• Value of new business (VNB) and VNB margins improved, driven by a shift to higher-margin products and innovative solutions.

• Cost-saving initiatives and process innovations are underway to reduce the controllable cost base, with benefits expected later in the year.

Financial highlights

• Quarterly earnings estimated at ZAR 1.3–1.4 billion, up from last year's ZAR 1.1 billion run rate, supported by positive investment variances and strong risk results.

• Recurring premiums rose 8% to R1.07 billion and single premiums increased 3% to R15.7 billion year-over-year.

• Assets under administration for Momentum Wealth increased 17% to R280 billion; health members under administration grew 2% to 1.28 million.

• Total direct expenses grew 8% to R3.24 billion, mainly due to higher personnel and long-term incentive costs.

• Life company capital ratio at 1.99, restored to just over 2.0 after Tier 2 issuance; Guardrisk and insurance licenses also above capital targets.

Outlook and guidance

• Focus remains on disciplined execution of cost optimization, with targeted annual savings of ZAR 500 million by year-end.

• Early signs of economic recovery in South Africa, with easing inflation and interest rates, expected to support disposable income and business growth.

• Ongoing review of dividend policy and share buyback program, with buybacks set to commence imminently.

• Financial ambitions for F2027 include normalised headline earnings of R7 billion, ROE of 20%, and VNB margin of 1%-2%.

• Cautious outlook on group risk (corporate mortality) profits, expecting some decline due to competitive repricing.